There is a fear among suppliers and contractors that sending preliminary notices will damage relationships with customers. However, many companies in the construction contracting industry have found the exact opposite to be true.
Pete Newstrom, the Vice President of Finance at Arrow Lift, and Don Myrick, the General Manager of Texas First Rentals, both send notices on projects and have found that they are getting paid consistently and with little to no pushback from customers.
Think about the supplier you buy from or companies that you hire on a regular basis. If you’ve become a regular customer, it’s probably because you know they are skilled professionals, and because they’ve made it easy for you to get the job done right.
Pete and Don have created this sense of ease for their customers by regularly sending notices. These notices illustrate that they know exactly what needs to happen in order for their customers to provide payment, and that they are professional and organized when it comes to collecting payments.
Don was hesitant at first to start sending notices to his long-time customers, fearing they would be upset. Instead what he found was that his customers appreciated the clarity around what was needed to make payment.
“What actually happened is that we got moved to the top of the list,” Don explained. “Customers were calling us and saying, ‘hey, we got your notice and we’d like to pay you.’”
Don saw a huge shift in the accounts receivables side of the business: He originally had to call customers and chase down payments, and now, they were the ones calling him. This may not have been the outcome he expected, but it is an outcome that was welcomed as payments began flowing in more consistently.
Because Don now has a streamlined process for sending out notices, his customers feel assured that he is reliable and organized when it comes to managing payments.
Pete shares a similar experience around sending notices to customers.
“Of the hundreds of notices that we’ve sent out, we’ve had very few questions or instances where a customer was upset. And in those few cases, we were able to explain why [we were sending a notice], and they understood,” Pete said.
Pete sends a notice at the front end of almost every job, and it creates a sense of consistency for customers. They know that they can count on Arrow Lift to provide the proper paperwork in a timely manner. And, for customers, this creates a sense of stability and ease when making payments.
Pete also goes the extra mile and sends a customized cover letter along with these notices to explain in clear terms why his company is sending the notice.
“So the folks who read that cover letter, I think, understand why it’s coming and how it works,” said Pete.
The custom note every Arrow Lift customer sees when receiving a notice.
For both Don and Pete, sending notices at the beginning their projects isn’t a means of threatening customers or going into defense mode. In fact, it is quite the opposite. Sending notices keeps the lines of communication open and prevents slow payments or situations where no payment is sent.
In a survey of people who had received a preliminary notice, more than half of the respondents felt that receiving a notice is simply part of everyday business. And, less than two percent of respondents felt mistrusted when receiving a preliminary notice.
“It’s really the sense of making sure our ducks are in a row and making sure communication is clear with clients,” Pete explained. “And, in those rare cases where there might have been an instance of non-payment, I believe that it has prevented those situations from materializing.”
Like many other equipment rental companies and subcontractors in the US, Pete and Don use Levelset to send notices with just a few clicks at the right time, every time.
Their process for sending these notices is automated, which saves them tons of time and effort and allows them to send a greater amount of notices than if they were sending them manually.
In fact, Don has pointed out that in the first five years of business they only sent out about 300 notices, whereas with Levelset, they have sent that same amount in less than three months.
Don and Pete are keeping customers happy and ensuring timely payment for their companies by sending notices before projects. Would you also like to improve your customer relationships and start getting paid on time? Try sending a preliminary notice for free with Levelset.
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