I work off of an aging report, When making decisions on filling a lien on an Arizona project what number in "days old" on a invoice is a red flag for me to start filling? For Ex. we have a invoice now dated 110 days aged.
1 reply
Jan 16, 2020
Establishing a Credit Policy
Determining how long you should let an invoice go unpaid, will ultimately be a business decision. Establishing a good credit policy for your business will depend on a number of different factors. The size of the projects, the size of your company, the cash flow needs of your business, and other factors. For some guidance on how to set up a sound credit policy, this article may prove helpful:
As far as timing for AZ mechanics lienpurposes, there's no bright-line rule to determine when you should file the lien. The only deadlines that really matter are the preliminary notice deadline (20 days after first furnishing labor or materials to the project) and filing deadline (120 days from completion of the project). Here's another article that you may find useful:
However, the best way to deal with late payments is to use notices. Particularly a Notice of Intent to Lien (NOIs). This is a simple letter stating that if you aren't paid within a certain amount of days, that you are ready and able to file a mechanics lien on the property. This is typically enough to induce payment before having to file a lien. In fact, our data shows that 56% of NOIs are paid within 42 days!