New York Debt Collection Statutes & RegulationsSeptember 15, 2016
US Medical Debt & Medical Collection ServicesJanuary 8, 2017
What exactly is happening with construction companies’ accounts receivable? There are naturally smaller or fewer construction jobs but the few lucky companies who get these jobs are also finding it hard to get paid.
HOW TO BILL CONSTRUCTION JOBS CAREFULLY CORRECTLY AND AVOID PEOPLE NOT PAYING
Research has shown slow, incomplete and erratic payment for finished jobs is one of the very common and distressing issues affecting or plaguing today’s construction companies. Procedures below here are simple, comprehensive and easy to put into place to mitigate these problems.
- Utilize a good and solid automated billing system. Software should have the ability to: consolidate all customer fees and transactions into one invoice; integrate with existing programs and files; provide billing formats that can be customized according to client; and allow the business owner to review and revise invoices before delivery.
- Request a deposit. Asking for a share of the money up front has become a standard practice in the construction industry, and with good reason. Besides covering start-up costs, the revenue can go directly into other company expenses, which contributes to a steady cash flow.
- Try the “pay-as-you-go” approach. Setting down a series of deadlines and payments over the course of the job, in the original contract, allows the business owner to stop work (thus extending the terms) when a client fails to meet his obligations. The consensus among industry insiders is that by a project’s completion, a very small balance of monies owed should be outstanding. Some contracts leave as little as five percent of the total cost.
- Allow for changes. An initial written agreement always should include a policy statement regarding subsequent modifications in design, labor force, cost and materials. By the same token, when a client requests a variance from the original contract, the savvy business owner will put these terms in writing, too. In some states, this already is the law. Include all new costs on the statement, and then bill immediately.
HOW TO ADD COLLECTION COSTS INTO WHAT IS OWED
A reoccurring situation that collection agencies face is the request to add-on or collects, the collection fees charged to the client for the collection of the account. While tempting, adding interest, service fees and collection costs to a delinquent account could result in unwanted legal attention.
- Section 808(1) of the FDCPA [15 U.S.C 1692f state that the collection of interest, service fees, collection cost or other expenses to the original debt is permitted when “such amount is expressly authorized by the agreement creating the debt or permitted by law”(emphasis added).
- The contract that creates the debt must specify what the interest rate, late fees, services fees, or other charges are going to be and must be signed by the consumer before a creditor can legally add them on to the debt.
- You need to be careful, just because you have a contract stating collection fees will be added, doesn’t always make them collectible. The fees being added must also be permitted by law. For example, if the consumer signs a contract stating they will be charged a $500 collection fee if the account is referred to collections, and the state law prohibits the collection of such fee from the consumer, it won’t matter what the contract says, the creditor will not be allowed to charge that fee.
ARTICLE BY: NEXUM GROUP INC