Every Friday, we select a few articles from the week that we think are worth your time as a construction financial manager (CFM). We look for compelling articles not only about financial topics, but about business, technology, and life, that challenges you to think about your role as a CFM in different ways. We’d love to hear from you about how we’re doing, and to have you join our community by subscribing to receive this weekly post by email. Follow #CFMReview.
How to Get Customers to Respond to Invoices on Time
“Asking customers to pay past due or soon due invoices can be similar to asking a small child to do something,” writes Todd McDaniel at cfo.com. He classifies the 5 types of responses customers will give into…
1. I will do it
2. I can’t do it
3. I won’t do it
4. I don’t want to do it
5. You can’t make me do it
For those that say “I will do it,” he urges cooperation: a friendly reminder before the invoice date can go a long way, not only to get you paid, but to bolster your relationship with the customer.
McDaniel also highlights an often-overlooked segment of customers: those that do pay on time.Don’t forget the positive reinforcement,” he writes.”A short email to thank a customer” will influence future behavior and save collections costs.
Increasing Infrastructure Investment Through QPIBs – Opening the Doors to P3s
Unlike most countries, the United States taxes public financing of construction projects differently than private financing. According to construction litigator John P. Ahlers, this creates disadvantages for private infrastructure improvements.
In his 2014 State of the Union address, President Obama proposed a plan to help attract private businesses to infrastructure projects with public benefit, introducing Qualified Public Infrastructure Bonds (QPIBs). QPIBs would be federally tax-exempt bonds issued by or on behalf of state or local government, and they are not backed by taxpayers.
QPIBs still need to be repaid (e.g. through tolls), but they provide P3s an additional source of funding; and, as Ahlers & Cressman writes, “The advantage of P3s remain… delivering infrastructure faster for less money, and with lower risks to taxpayers.”