Levelset visitors can also get a free Procore account.

Best Practices for Closing Out 2019 AR Invoices | Webinar



Project Type


Best Practices for Closing Out 2019 AR Invoices Webinar

Watch this webinar to see how to close out your AR for 2019 and learn how waivers, invoice reminders, notices of intent, and mechanic liens can help prompt or secure payment!

You can also download the presentation slides here.

Full Webinar Transcript

Jim: Well thank you everyone for joining us today. Thanks. This is our, one of the last classes we have for our 2019 level-set class series a. We’ll be going over your bet, the best practices for closing out your 29 AR invoices. We recognize, you know, there’s, there’s a lot of difficult parts about construction, but paperwork’s really shouldn’t be one of them. And again, thank you. Thank you so much for joining myself. And Michael Williams. I’m Jim. I’m an education expert here at level set and what I do is I work with new customers to make sure they have the resources, tools and knowhow in order to be successful and accomplish their goals using level set.

Michael: And I’m Michael Williams. I’m level, I’m the manager of financial services here at level-set. So what that means is I work with our growth and business development teams to look at opportunities of helping you get paid faster or more easily. And so that involves a lot of things including helping with your AR processes. So we’re excited to help you guys close out your 2019 successfully.

Jim: Yeah. And the, the goal today is to just introduce some general processes and best practices for utilizing in your collections process. And this is for closing out the year for all your accounts receivable. And we recognize, you know, it is, it is the coming into the middle of December and it’s, it’s unlikely that you know, somebody is going to completely close out their books between now and the end of the year, especially with the holidays and folks on vacation. But really at whatever stage you are in, in the collections process, your likelihood of actually collecting on a job is going to be much greater if you actually send a document or have a process in place rather than if you take zero action at all. So really today we’re going to go over at a really high level why it’s so difficult to get paid in the construction industry. We’ll also be going through and showing you some documents that we offer here at level set that can help you close out the year and get paid. And we’re also, I’ll also jump into the product at the end to show you exactly how easy it is to close out a, to send a document using level set to prompt payment.

Jim: So really this is, this is the reason why there are such big issues with getting payment on time in construction. This is what a payment chain looks like. This is your typical typical job. Property owner hires the GC and then from there on down folks get subcontracted out. So the more parties that are involved in any, any given construction job is going to create more risk. And this risk really, really comes from a lack of visibility on the job. So the folks writing checks aren’t, aren’t necessarily sure who, who the checks are supposed to go to. And this just complex hiring structure really creates a, a real lack of visibility and no transparency. And if an, if an issue pops up on anywhere on the payment chain, it can cause issues for everyone involved in the job. So that’s why here at level set, we’re really, we’re really big proponents of creating job.

Jim: Job site transparency to avoid these issues from the get go. So this is, this is why this comp, this hiring structure creates such big complications. The owners, GCs and folks above the above, any given contractor on the payment chain are sending an, exchanging these documents and because of, because this lack of visibility leads to such great financial risks, a lot of folks try to you know implement practices and processes that protect them or mitigate the financial risk. So whether that’s making folks send, you know, notarize waivers or sending a particular document at a particular time in order to get payment for the, for the work that they perform that all, all those, all those behaviors are shifting risk away from away from the folks at the top of the payment chain here. So we’ll just in general, this is what causes slow payment and non-payment and construction for the most part and level set does have a remedy for that. So today we’ll mainly be going over how to improve your visibility on the job. And by doing so, closing out your 2019 accounts receivable. We’ll be going over payment reminders waivers, notices of intent and liens.

Jim: So before we get started, I’d like to just get a feel from everybody out in the audience here. What methods do you currently use to remind customers of either upcoming or past due invoices? I’m going to launch this poll right here so everybody can participate. So a lot of, a lot of folks will, you know, get on the phone with somebody as soon as you know, an invoice is due, other folks will send send emails. I’ve even heard of our customers sending out you know, folks on service jobs to give a quick knock at the door. Some folks will recent invoices, I’ll give everybody another, another moment or two. And really every single one of these there, when they’re used together in conjunction, they can be really, really powerful. Some of these are, you know, going to be better, better suited depending on the type of resources that you have available and the type of time you can devote to, to collection efforts. So I’m gonna give everybody about five more seconds here and

Speaker 3: [Inaudible]

Jim: It looks like nearly everyone on on the call today. I at least uses emails and most people will either resend invoices or also jump on the jump on the phone to try to remind mine folks. And this is a in case you’re wondering how, you know your you know, fellow fellow contractors and accounting specialists remind folks of past due invoices. This is what your counterparts on the call today are doing.

Speaker 3: [Inaudible]

Jim: So Michael is here on the call with me today and he has, he has a lot of experience with accounting and accounts receivable in general. So I’m gonna ask Mike Michael a couple of questions here about payment reminders and payment reminder processes. So in your, in your opinion, why, why is it so important to have a good payment reminder process in place, Michael?

Michael: Sure. Well, you know, you can think of a payment reminder. If we refer back to the last poll that 100% of the people who answered said they sent an email. And so a payment reminders, essentially an email function of saying, I wanted to remind you that this payment’s coming up or that this payment is past due. It’s a really friendly way to be able to simply say I need to be paid. And so it works in conjunction with what’s already happening. And like anything else, if you have a process in place, you’re that much less likely to forget to send that reminder in level set does a great job of giving you a tool to automate what you’re already doing, which is sending an email reminder, which essentially the, the payment reminder is

Jim: Right. Awesome. a lot of folks, a lot of the customers that I work with, they, they let me know that, you know, the end of the year is always very, very difficult for them to collect for a multitude of reasons. You know, you have folks going out on vacation. The holidays are always, you know, a big, a big distraction for folks. When, when should, the biggest question that our our customers have is when, when should they start that process of closing out their books for, for 2019. What’s, what’s a good good time range?

Michael: Well, like, like most questions and accounting or finance, the answer is it depends and it really, it depends on how many other hats you wear. If you’re wearing a lot of other hats, if you’re, if you’re balancing books as well as collecting, then you probably need to start those processes earlier because you’re having to do other functions as well. If you’re solely collecting, if you’re a collections specialist, then you can probably wait a little bit longer. But as we mentioned, it’s still good to have a process in place to make sure that you know exactly how much time you need to afford yourself to close out the books given that it’s a busy time of year, not just for you, but also the people that are on the other side of the coin, the people paying the bill as well.

Jim: And then so that, that, that brings up another question. When you send a payment reminder that, that, that’s meant to help, help you collect, how does it also help you know, the, the, the folks that owe you the money?

Michael: Sure. just as we said, that person is really busy as well, given that they also have the holidays, they’re also trying to close out their books as well. They may have every intention of paying you, they just may have forgotten and you don’t want to be the, the payee that slipped through the cracks of the payer. If you send an invoice reminder, it is exactly that. It’s a reminder of a payment reminder to say, Hey, I know it’s a busy time of year. This is just a friendly reminder to say we have this we have this receivable coming due or past due.

Jim: So it kind of helps you, you know, stick out from the crowd a little bit when that AP specialist is looking at their books and trying to close out, close out their business for the year as well. Right. Awesome. Cool. so when another question that came up with some of my customers was what factors should I consider if I’m implementing for the first time or if I’m tweaking my current payment reminder process?

Michael: Well, if you’re implementing something for the first time, you should always ask what you’re trying to solve for, what current problems would a process potentially help with and then that can help you determine what it is. If it’s a time factor, if I don’t have enough time to do these things, implementing a payment reminder process would be great because it affords you more time to do other things. You’re automatically sending reminders for payment and that gives you more opportunities to do the other functions of closing out your year. If you already have a process in place, then you should look, well, what do I need to change and why am I not collecting fast enough? Are these or am I not collecting in the ways of which I want to? And so again, it depends, but you should always ask the question anytime you’re starting something new or changing something you’re already doing of why you’re making that change and what would be, what’s your goal, what are you looking to accomplish and changing

Jim: Process. Gotcha. Thank you. And I just realize I’m being a, I’m being a bad webinar host. If anybody has any questions you can either chat us in or raise a hand. Really quickly. This is what the payment reminders in level set look like here. On the right hand side is basically the da, the da an example or sample of the document and they’re really friendly. The way that we, the way that we build them. They basically have the invoice number, the amount due, the invoice date and just requesting that folks I remit that payment at their earliest convenience. The nicest thing, and I, and I know a percent of you are already using emails. I know myself when I have to write out, you know, a bunch of emails for basically the same type of subject that can, that can be time consuming.

Jim: Even if I’m just using the same the same body level-set, you can order these with a few clicks. And I’m going to go through this at the end of the, at the end of today’s webinar. But really the neatest thing I think in terms of sending any type of payment reminder through level-set, we exchange them electronically so we email them directly to your customer. And what we add here is we add when we emailed the document, when it was opened and how many times it was open. And I know from working with, you know, countless contractors that these little tidbits of information can be really, really helpful. Maybe not at the outset of sending a payment reminder. It can still be helpful, but if you don’t get paid for that invoice and you need to escalate the situation these can be tidbit. These tidbits of information can be really, really useful in terms of a helping you decide whether or not to do that and be navigating that decision with the customer as well.

Jim: So that’s it for payment reminders until we go through at the end. One more time. The next document I want to talk about are lien waivers and most of our customers here use lean waivers in exchange for payment. So I’d like to, I’d like to know exactly when do y’all typically use or exchange lean waivers? So the the options are only when required by my customer after I receive payment or I attach a conditional waiver to all of my pay applications. All righty. It looks like just about everybody has answered here and it looks like a good portion of you are, you know, you’re, you’re only using them when they’re required, but some of you are doing are using these in a, in a proactive way as well. But it’s great to see that there that folks are familiar with this type of document.

Jim: So I want to get into what a lien waiver is first before we go on to to discuss them. They’re typically exchanged during a project for, for payment and they work, they work as a receipt. And they, there’s generally a few different types of lien waivers. We break them down by conditional and final payment, conditional, conditional and unconditional and progress and final payment. So you have four different types types of waivers there. And the biggest, the biggest thing here is most of our customers don’t like to send waivers until they’ve received payment. But a lot of the payers that we work with don’t like to see you know, issue payment until they receive a waiver. So it creates this little catch 22 where, you know, both parties are basically waiting for the other to either act or submit that document. So Michael, really quickly most, most of the time our customers are thinking about waivers and exchanging them once they receive payment. How can sending one of these over to your customer help prompt payment?

Michael: Sure. Well, the both the poll results in the example you just gave of the catch 22 of I will only pay you when I receive this waiver. It, it, it becomes a who’s going to act first game. And in this case the conditional waiver is a great tool to utilize to say you will get the waiver you’re asking for in exchange for payment because often the payer cannot receive their next drop payment until they’ve received all of the waivers from their payees too. So the person at the top of the chain, above the general contractor or whomever it may be, has the assurance to know that the liens, the lien rights had been absolved because they have been paid. And so essentially you’re holding out a carrot for receiving payment by issuing a conditional waiver. You’re not, you’re not giving up anything you’re saying you will get something in return for, it’s like a help me help you type of scenario.

Jim: Sure. So I’m, what I’m hearing is, so for folks who aren’t necessarily 100% familiar with what a conditional waiver does a conditional waiver that is signed. So this is pulling straight from our we have a great ultimate lien waiver guide. And I w I will, we’ll share that with, with y’all with the slideshow deck and the recording of this webinar later. But straight from that verbatim, a conditional lien waiver that is signed is only effective upon the occurrence of something else. That something else is almost always the actual receipt of payment and other words getting paid is the condition that the signers lien rights are waived in and only if they actually get paid. So that, that that sentence right there will that will, that proves that we can use these conditional waivers to resolve that, you know, catch 22 that I was just describing.

Jim: So these are, these are relatively these are less risky documents to send and you know, an unconditional waiver or anything like that. Generally those are effective as soon as you sign. So we generally don’t consider it best practice to sign one of those until you receive full payment. One word of caution with conditional waivers though, just because they’re relatively less risky than a unconditional waiver. It is important to note that the amount on the waiver that’s listed on the waiver is almost always more important than the amount of money that you actually, we have a really great example on our website about a contractor who there was a, the amount listed on the waiver was $100,000, but he received a check for 50K and didn’t receive the remaining $50,000 that was owed to him. Ubut since the amount on the lien waiver was,uyou know, $100,000 in the eye of the law,uhe had been paid in full and he had already waived his rights on that additional 50 K. Uso those, those situations can be like, those situations can be highly specific. Uso it’s always best practice to,uyou know, consult with our resources, consult with our expert center. If you ever run across any of those,usituations,uin your own life.

Jim: So we, we just talked about payment reminders and conditional lien waivers as means to prompt payment. And I do see that we do have some questions coming in and I will, we will definitely get you get to your questions before we jump into the product demo here. But moving on to two notices of intent. These are, these are going to be more of an escalation document whereas the first two documents that we went over with payment reminders and conditional lien waivers, those are going to be more, more proactive. So a notice of intent can be proactive, but it’s going to be an something that’s sent after a payment issue has already been experienced on a job. And really to, to back to back up here we need to talk about the why behind a notice of intent and what it does.

Jim: A notice of intent to lien is generally a voluntary document. And those, it’s typically sent before a lien is filed on a job. And it’s a last warning, last warning shot that you’re about to file a lien and also alerts other project stakeholders like the property owner or if there’s a lender on the job it makes them aware that there is a payment issue on the job. So you’re not only communicating your intent to lean with your direct customer, but also anybody above the payment chain or really anybody that has an interest in keeping keeping the job lien free. So I’ll get into to lean law one Oh one here in just a moment. But in terms of sending out notices of intent, what they do is they communicate that there is an issue and generally just communicating that there is an issue can be enough to get you paid.

Jim: So what that means is it’s just letting those stakeholders know, Hey, there is an issue here. I know you have a vested interest in keeping this job lien free. What’s come to let’s come to an amicable, amicable solution here. A lot of times it can help you get paid to, even if you don’t have lien rights. So if you’re outside of deadline or you missed a requirement they can still help you get paid. Mostly because Lila is very, very complicated. And it, it’s contingent on a lot of factors and figuring out whether or not somebody has lean rights can be a very expensive endeavor and very time consuming endeavor. And at the end of the day you know, that they might’ve spent all that time and you might still have lien rights. So just be because of the complex nature and because not a lot of folks are super well versed in lien law sending one of these documents, even if you know you’re outside of the lien deadline or your or your Wainwright’s can help you get paid.

Jim: They’re also inexpensive and relatively risk-free. So in most cases, most States they are voluntary documents, meaning that a, they don’t they’re not required in order to file a lien later and B, they don’t impact your any other deadlines or requirements on the job, meaning sending a voluntary notice of intent to lien. That’s not necessarily going to extend a lean deadline or anything like that. But they are inexpensive relative to filing a mechanics lien and they are, because they’re voluntary documents, they are risk-free. You’re in no worse position for sending one. Then you were, before you didn’t send them, you’re actually in a better position because you have a chance of prompting payment with that, you’re at least getting, getting the other parties to the table and getting them involved here. So I know from working with customers, Michael whenever we talk about whenever the word lean is involved, that kind of, that kind of scares folks and for good reason it’s, it’s pretty serious business. In terms of co collections process winter notices of intent effective tools and helping you collect.

Michael: Sure. If we think of escalating a receivable, we, you know, we started with the friendly payment reminder and we’re working our way up into getting more serious. And if you haven’t explicitly found out why someone isn’t paying, you don’t know what the trigger point may be, they may get hundreds of emails a day. But if you send a notice of intent, that may be the one pressure points which leads to a payment. And like you said, because they’re inexpensive and risk-free, that simple change, the simple fact that it has a chance to work makes it a good practice to do and level set of course is a great tool to be able to do that and automate those processes and make it easy to do these things to make sure if I haven’t gotten paid at this point, I should go ahead and escalate this. It’s essentially helping you do your job better of collecting payment.

Jim: Sure. Awesome. And one one thing that really sticks out there too is it’s also as TT as these documents can be and as like adversely worded as they can be Ebisais early worded as they can be. They’re really, they, they are almost a courtesy to property owner and anybody else because it gives, it gives folks a chance to come to the table and open that discussion up about payment. So that way lawyers don’t have to be involved. Liens don’t need to be filed and you know, basically the project doesn’t, doesn’t get negatively impact as impacted as a whole. So that’s, that’s another way to look at them. I know they, they are generally scary, but you can also think of them as, as courtesy documents too. And just from a, from a collection standpoint as well. We had another, another question that came up. What factors should I consider before sending a notice of intent?

Michael: Well that, again, these are all generally speaking, but you should take into account when deadlines are coming. What other steps you’ve taken? Have you sent out notice payment reminders beforehand? Have you escalated gradually, it’s probably not best to come out of the gate and just say, I’m sending you a notice of intent. It goes from zero to 50 pretty quickly. And so you want to take into account what types of notices you’ve had with this person. Have you made other attempts to collect beforehand, but also keep in mind the deadlines that you may have coming up because you want to make sure and protect your, your lien rights, which I know that’s something that you’re, something that you’re very passionate about.

Jim: So another another thing I’d like to mention in terms of factors, and this isn’t from a an accounting perspective or a collections, but it might be involved in, in a a factor that you consider when I’m coming up with a collections process. But it’s always about how, how communicative and responsive has that customer been to your previous outreach attempts for for payment? What’s their track record with your company? Are they, are they typically slow payers or you know, are they generally pretty good and something, you know, maybe something’s going on at their company right now. So just keeping, keeping in mind the customer relationship that you have with that particular company is really, really important. In considering when, when, and when and if you’re escalating a situation from yeah.

Michael: And if you’ve only communicated via email leading up to this point, it may be a good idea to pick up the phone and call or try another method because they may not be receiving the email or it may be going to the wrong person. So not only the relationship you have, but what means of communication you’ve tried with the proceeding attempts or the proceeding methods.

Jim: Yeah. You might not have a good email address for that, for that particular person anymore. Maybe they’re no longer with the company. Are in my experience working with people on both sides of the coins payers and payees. Everybody wants to make sure in, in general, everybody wants to sure folks get paid. It’s, it’s what makes the project successful. It’s what you know, allows folks to, you know, continue working with customers on a recurring basis. And it really, it really is. It really is about just managing that, that relationship with those folks to make sure your future business isn’t jeopardized by you know, or authority by your collections attempt because you’re not exhausting all avenues first.

Jim: So I’m going to get into, we’re going to move on from notices of intent this after this slide. So this is the, are the average time to payment for construction companies is about 83 days. And one really powerful statistic we found was 56% of all O are paid within 42 days, and that’s almost half the industry average. So folks when they send an OIS or have NOI is as part of their collections process, generally are able to you know, collect a lot quicker on all their jobs. And also contractors in general with NOI policies in place, see 90% of their notices of intent paid within 90 days. So that’s, that’s a pretty good pretty good percentage of the amount of receivables that you’re collecting within 90 days, which is, you know, just above the industry average. So my point, my point being here is that these are really, really powerful documents that work and contractors all across the country have implemented this to collect on their aging receivables.

Jim: So closing out the year with liens liens are the very last resort. It’s, you know, the nuclear option. It means that somebody is not getting paid or there’s a really large dispute which puts put somebody’s payment in jeopardy. And these can be, these can be really helpful because they can help, they can help secure your payment and they do so in multiple ways. But just in general, I want to point out that with the, with the end of the year in mind, it’s just a, it’s a good idea to maybe think ahead of maybe some upcoming lien deadlines. But a few, few of the, few of the things to keep in mind with what Alina actually does. Most folks, you know who come, some folks come to us and they have a really, really great understanding of what of lean accomplishes.

Jim: Some folks, some folks do not, so I’m just going to go over what it is. Basically what a lean does is it secures your payment. It secures payment rights by attaching itself to the actual property in which work on which work was performed on. So it’s not against particular contractor. It’s not against a particular subcontractor that didn’t pay. It’s actually gets tied to the property where work took place. And what it does to the properties title is it makes it really difficult for the property owner to do anything financial with the, with the property. Whether that means refinancing, getting a construction loan or trying to sell the property. The biggest that it creates a lot of leverage and the biggest, the biggest piece of leverage that it gives the claimant or the person that buys the lien is it allows them, it encumbers the property which allows them to sell it.

Jim: So and that’s another big misconception we have with, with mechanic liens is some folks have the idea that liens are just put in place and then the person can’t sell the home. Each state has their own deadline for enforcing a lien claim or foreclosing on the property. So with, with that being said, just the idea of a homeowner thinking that they may lose part or all of their home because a contractor didn’t get paid, makes that a really, really powerful tool to make sure that you do receive payment and that the dispute along the payment chain gets cleared up. So I, I like to say that helps prompt and secure payment because sometimes liens can they can drag on for a little bit. And when somebody, when, especially when a lien is filed around the holidays somebody might not get back, get back to addressing that until after, but at least the you know, the lien is in place.

Jim: And one thing I do want to mention before we kind of move on to a couple of questions here. Even if you expect her to see payment, if you’re coming up against the lien deadline and you want to take into consideration your customer’s relationship, the relationship you have with your customer here, but definitely consider filing the lien. Even if you expect to receive payment before the lien deadline, once the lien deadline has passed, a lot of times either a, the recorder might not accept it or B, it might get contested and validated. So these are, these are, it’s a pretty serious business filing a lien. I’m sure. So besides just my, you know, customer relationship in mind from a collection standpoint, what are some factors I should consider when filing a lien?

Michael: I think you touched on the main one, especially towards the end of the year. You, the likelihood of collecting as you get later in later in the year, it goes down because there’s a limited amount of time. And of course the holidays, people aren’t in the office. However, you don’t want to lose your lien rights because you missed the lien deadline. So that should be the first thing you look at is what, what lien deadlines do I have? And make sure that you’re protecting your lien rights because you’re not going to be able to close out all, you’re not going to be able to collect on all your receivables before the end of the year. But it helps you sleep better at night. Knowing that even though I didn’t, I didn’t collect them, that I can go into the new year knowing that I’m protected on the ones I didn’t collect. So in those where the deadline matches with a receivable, that still has not been collected. It’s a good, it’s, it’s probably the second best to getting paid is being able to say this hasn’t been paid, but I’m protected. I can close out my books with confidence.

Jim: Awesome. And do you have any tips for folks on the collection side on how they can you know, Anik amicably manage their customer relationships while still not missing a lean deadline? Sure.

Michael: Transparency is paramount. And the, the notice the notice of intent is an ideal tool for transparency. You’re essentially saying, I’m giving you notice that if I’m not paid, I can send a lien. If you take that step, it shouldn’t be a surprise that a lien is coming because you’ve been transparent throughout the process to say, I need to protect my lien rights. If I don’t receive payment by this time, then I will have to file a lien. And so it’s not, it’s, it is somewhat more, it’s more hostile and it’s escalated versus a simple payment reminder. However, if you’ve gone through each step of escalation, it’s not a drastic move. It shouldn’t come as a surprise and you have that to fall back on that you’ve been transparent throughout the entire process. Awesome.

Jim: So I believe we do have a few customer questions here, audience questions. We’ll try to get to those before.

Jim: So we have a couple questions here. Do you only have lien rights from one of the panelists if you have pre lien the job? So that, that depends on the state. Your role in the project type. We do have state by state resources and you can use the level, set your level set account to calculate any deadlines or you know, significant milestones on a job. The second part of that question is, does a conditional waiver carry any way? If you have not pre leaned a job and it, it does carry a lot of weight. And I think Michael, I think Michael said it best. I’m here about that catch 22 you were talking about.

Michael: Yeah, sure. I mean you’re

Michael: Also, as I mentioned in the slide in the presentation, even if you don’t have your lien rights, the ability to manage all these complex timelines, sending that even in a situation where you don’t still have your lien rights, sending that documents stood could still help you collect and then the situation in which you do that conditional waiver is essentially a, help me help you. I know you need this waiver to get, to get paid or to get your next draw payment or to, or to sell the property or to lease the property. A multitude of scenarios. They can’t do those things without paying you. And so that that waiver is a really effective tool and getting you paid. Great.

Jim: There was another question that was specific to something kind of outside the the scope of this presentation today. Not to worry though. We’ll get, we’ll, we’ll follow up with you via email after the presentation. So I’d like to know from, from the audience which documents will you exchange to help prompt payment at the end of the year?

Speaker 3: [Inaudible]

Jim: So the options here are payment reminders, conditional lien waivers, notices of intent and mechanically and it looks like a majority of folks are going to be sending out payment reminders and notices of intent followed by conditional lien waivers. We’ll give everybody another moment or so to, to answer here.

Speaker 3: [Inaudible]

Jim: All right. It looks like just about everyone has answered here. And at this point I’m going to jump into, so in case you’re curious on how other folks are going to exchange documents to close out the year, it looks like not many people plan to file a mechanic lien, which is great because they’re using all these other documents before they need to get to that point. So they’re sending, they’re going to send payment reminders, conditional lien waivers and notices of intent. And I’m going to stop sharing those now and I’m going to jump. Oh, we have a, a great question that just popped up from one of our customers here. So they’re saying they’re asking Michael her name is Kim and I don’t know where Kim is from, but hi Kim. Thanks for asking this question. So Michael mentioned that collection efforts will likely not result in closing out 100% of your accounts receivable. What are some best practices and processes that we can put into place to make collections in 2020 easier?

Michael: Like we had talked about with forming a new process. If you’re looking to achieve a goal to close out your year it’s typically just an accelerated or more pressured goal that would exist throughout the year. You know, you talk about all the time have a goal of at the end of the year, it could be done at the beginning of the year and the processes we put in place to collect payment. Now, if we had the same urgency at the end of the year, throughout the year, then your end of the year next year it’d be a lot better. So none of the advice that we gave today or the, or the suggestions that we gave our best practices is exclusive to closing out your year. It can be done throughout the year. And if you carry those same the same escalation processes into January and you do it throughout 2020, then you’re probably going to have a cleaner accounts receivables accounts receivables line when it comes into closing out

Jim: 2020. So what I’m hearing is if you’re, you know, taking these practices throughout the whole course of the year, maybe that last two months won’t feel as much like, as much of a scramble to close things out.

Michael: Right? And you saw with our poll results that everyone is looking to implement a payment reminders and that’s a really good tool because that as an automated process, you at least to know you’re making efforts to remind someone that you should be paid. That’s a great starting point. If you do that with every single, every single receivable you have, it can only help. It can’t hurt.

Jim: Great. one other thing I’d like to like to bring up as well. I work with lots of contractors who do work in all over the country and one of the most effective things that I’ve, I’ve experienced with them, a lot of, a lot of customers were used to before joining level set. We’re used to sending more reactive documents, you know, a notice of intent to lien and liens. When folks decided to implement more proactive preliminary notice processes. So remember back to the beginning of the presentation when we talked about it’s tough to get paid in construction. And we get paid slowly because of the lack of visibility due to a complex hiring structure. Sending a preliminary notice at the beginning of a job will help combat that. And it will make sure that you’re opening up a proactive line of communication with all the stakeholders on the job that have an interest in keeping the job free. Why wait until you’re 60, 90 days out on an invoice to start the talk about payment. Let’s set this expectation up from the, from the very get go and set up every job for success.

Jim: So at this point I am going to jump into a test account and I’m going to show you how easy it is to order one of these or send one of these payment reminders or invoice reminders using level set.

Speaker 3: [Inaudible]

Jim: And I do have a couple questions here that just popped up.

Jim: Can we customize our letterhead? Yes, we do offer customization custom cover letters and custom documents. If you’d like to learn more about that, Russel, you can speak with your account manager. And Russell also asked, don’t you think it would be helpful if the scout team gets email addresses from owners and lenders, so waivers could be sent to them also. Russell, that’s a really great point and it sounds like you’re you have a lot of experience with the level set, with your level set account and with how we work in general lean waivers and payment reminders. It’s a really good point. We exchange those both electronically via email. So it is going to be really important if you want to use level-set to, to exchange those documents that you’re adding those, that contact information as well. In terms of the scout team, that’s really great. That’s really great feedback and we’ll be sure to log that. I’m going to jump into a little test account here and feel free to ask any questions that, that percolate here. If you’d like to see any, any additional demonstration, I’m more than happy. We also, if you have any questions for Michael or myself that are more general about closing out AR or what level set has to offer, please let me know.

Jim: So this is the homepage or the dashboard as we call it for each level set account and we can add it, we can exchange exchange a document as soon as a job is stored. So creating a job does not take much time at all. And I’m going to show you how quick it is. All you need to create a job in level set is the job site address. So my, some identifying information about the, about the job the project type, your role, your customer’s role,

Speaker 3: [Inaudible]

Jim: And your customer’s details. And I’m going to add myself here. And once a job is created, you have, you have a lot of functions inside the inside your level set account. But to keep things simple and quick. Today I’m going to add a add one invoice for today and it’s not paid. So I will be able to create a payment reminder with a few clicks of a button. And I can also do the same thing with my other documents, like a conditional waiver and a you know, notice of intent if it gets that, I hope it doesn’t. And also with a mechanics lien

Jim: And as you can see, the, you know, the most amount of time it took was to end the majority of the time was creating the job in level set. Once the job is in level set, it’s a matter of just a few clicks and making sure the information is there. And this has been created and emailed to my personal email and you can see that that took less than two minutes for me logging in to getting it sent. And this will be 100% trackable. Again, that’s really useful information, especially when Michael and I were talking about. Sure. Factors to consider before escalating a receivable. So yeah, it’s, it’s really, really simple and if you ever need any, any help or guidance you have my contact information and we also have a fantastic five-star support team right here. You can also get in touch.

Jim: You’ll have the, the slideshow deck. We have the ask an expert center. So we have a really great free resource for our, for anybody who visits the level set site. It’s staffed by a combination of in house attorneys along with a network of payment experts that we built throughout the country. And they’re here to provide you with info, legal information, information on best practices. And if you’re in a particularly sticky situation, they might be able to provide you with an a menu of options of next steps. Keep in mind, we’re not a law firm though here, so we’re unable to provide any type of legal advice.

Jim: Do you see, we have another couple questions. So Paul is asking about visualizing the workflow and timing of paperwork. Do you have something that could address this or is it too difficult giving the wad difference from state to state? So Paula, one of the, we do have state by state resources that go over deadlines and requirements for each state based on your project type and the role you have on the job. Fortunately though you know, we we have all that information built into the level set to the level set platform or your level set account if you’re a subscriber. And that’ll let you basically we’ll take the project state once you enter it, the type residential, commercial, state, County, federal, your role and your customer’s role to let you know which documents you need to send. And when you do send them by, I would suggest tuning in next week. We do have a webinar on basics of going through the level set account and how to track deadlines and add jobs. You might be really interested in that, Paula.

Jim: So we do, we will share this slideshow deck with everybody that registered for the call today. You’ll also get a recording as well of today’s webinar. These are some really useful tools that will help you you know, refine your current collections process or if you need additional assistance or resources to you know, get going with one. You can start right here. If anybody has any additional questions, we’ll stay on the line for a few more minutes. But the next steps for closing out the year for anybody on this call is to get, get more visibility into your outstanding invoices and deadlines. So just be aware of what’s, what, what you’re owed and when it when you expect it to initially collect on that. Second, let’s send some payment documents to remind customers of past you invoices. Like we said, like we said at the beginning of the, of the talk today you’re a lot more likely to collect on a receivable if you change a document in relation to that receivable than if you don’t take any action at all. Secondly, if you want more education for your team contact us here at level-set. We’re here to help.

Jim: Again, this is how you get in contact with our support team and this is our ask an expert center and remember that we’re here to help you and we’re here to empower you to get you get you what you’ve earned. Thank you everybody for attending. We’ll stay on the line for another few minutes if anybody has any additional questions. Thanks everyone.

Jim: It looks like we just got one. Is there a way to, so Russell is asking, is there a way to have the system notify you that a project is over 30 days and payment reminder could be sent? That’s a really great question Russell. And we do have the ability to set up document rules or automating these payment reminders so that if a receivable is entered into level-set or in it has aged for any, any amount of time that you set, whether that be 30 days, 45 days, whatever your terms are, whatever you want, we can set up automation based off that invoice date and the aging of that invoice. Really great question. It’s something we do offer though.

Speaker 4: Okay.

Jim: And if you’d like more information on that, you can get in touch with your account manager. Really great questions today, by the way, makes our job a lot easier, huh? Yeah, yeah. Oh, we have we have Russell is timing and again, and asking what do you call a broke Santa Claus. Saint Nicholas. Well, thank you for that Russell. Thank you. Thank you. I hope you have a wonderful day.

Michael: Santa Claus is broke because he didn’t send his payment reminder.

Jim: Exactly. Jill is asking if our customer has a landlord, does the landlord need to get the notification also? That’s a really, really good question, Jill. And that’s going to depend on a few different factors. In general, if you are sending initial and initial payment reminder, Michael, what are your thoughts on just the, the first initial payment reminder of including anybody else? I mean

Michael: You probably for the initial step, you would only send it to the person paying you if it, so you don’t know the context of why they haven’t paid and it probably wouldn’t be best practice to escalate it to everyone involved. You don’t want to damage an unintentionally damaged your relationship that the, that your customer has with with their customers. Sure. That’s a, and that’s a

Jim: Really, really good point about, you know, not involving other project stakeholders. You know, right from the get go with one of those payment reminders. But if you are filing a notice, if you are sending a notice of intent that’s generally a good idea at work. You’re sending a preliminary on the, on the job to at the very get go. Those are two documents where it is generally best practice and for preliminary notice it’s often required that the property owner, the actual owner of the property receives the notice. But in terms of a notice of intent, it’s generally considered best practice to alert the property owner as they are. You know, the ones, at the end of the day, if a lien is filed, the property owner would be the one liable for that debt in most cases. Those are, those are great questions. Thank you.

Jim: Alrighty. And I did just get a, another question here and yes, I will, I can email you Russell after this. I will, I can set that up for you. Thanks for coming today Russell. Merry Christmas to you too. Thank you. Thanks. All right, if anybody else has any questions, we’ll stay on the line here for another couple minutes. If not, you can always email me. You have my co, you’ll have my contact information. And if I’m not the best person to answer the question keep in mind we do have people who are experts in all different types of payment related topics here. So if I’m not the best person to answer it, I can put you in contact with the person who is. Again, thanks everyone so much. It’s been a pleasure. And we wish you the best of luck. Closing out your 2019 accounts receivables and we wish everybody a Merry Christmas. Have a happy holidays. Thanks.