Webinar: How Restoration Contractors Can Get Paid Faster
Watch this webinar to learn 3 actionable steps that will lead to more cash, faster pay cycles, and happy customers. Restoration companies across the United States use this process to speed up cash flow, and have been able to reduce the average time to payment to as little as 17 days. This webinar covers how many of our restoration customers use preliminary notices to manage expectations relationships and cash flows. When you collaborate on payment with Levelset, you can avoid mechanics liens all together.
Full Webinar Transcript:
All right everyone. My name is Garrett. I appreciate your time. I’m going to get started. Obviously first welcome to Levelset. We’re going to be talking a lot about restoration companies in general, how to get them paid faster.
A little bit about myself, I personally work with a lot of restoration companies, have worked with them in the past as well as currently to help them manage the lien process, the challenges that are associated with restoration in general. I’m excited to talk to you guys and kind of fill you in on a little bit of some secrets of how we’ve helped them and overall best practices.
A little bit of a housekeeping, if you have any questions, please comment in the question section. I will get to, there’ll be a section in the end of this webinar where I will be answering some of those questions, so please comment in those.
Also too, I will be sharing some slides. We will be recording this, so if you guys are interested in obtaining that, we will send you guys one after this. Please ask as many questions as possible, that way we can help you.
Here’s what we’ll be covering today. Here’s myself, I’m here to help with payments. A couple of things that we’ll be doing, we’ll be talking about how we set the right expectations for restoration companies, how we resolve issues with certain documents that we offer and have found successful before anything arises and flare up. Then we offer a software to help manage all of this, all of these processes, all of these documents, keep it very easy for you. That way you guys can focus on the other things that are important to the business.
First … Also too, disclaimer, I’m not an attorney, so we are not a law firm so we don’t represent anybody. These things that I may be discussing today are best practices. Things that potentially could be required based on the state regulations and based off of resources that we have. Can’t provide any legal advice, but we do definitely have some best practices that have helped people in the past.
A little bit about who we’ve helped, we help everyone from franchises, a couple of people included our restoration one, ServPros, PuroCleans communities. Restoration Rebel is a huge group of ours that we help with these types of things as well as independent restorers because we know that you guys are going to be working on your own, starting your own businesses and that’s where everything counts. We really focus on small to medium-sized businesses. Every dollar matters when you’re starting or when you’re established. Cash coming in is always important. That’s the name of the game.
Here’s some of the people that we’re helping and have helped in the past. Some of the challenges that these guys are coming to us for are, we obviously know that you guys are wearing a lot of hats. Y’all are stretched thin, y’all have a lien. Typically restoration in general have lien, amount of employees. You’re spread thin, you handle payroll, you are out in the field doing the work. Proposals, bids, all those, all those things that affect business, so we understand that there’s a lot of different things that you are focused on and adding something else to the plate, like lien rights or documents that can get a little bit hectic is sometimes challenging. Obviously massive piles of paperwork. Like I said, bids, things of that nature are definitely something you focus on. There’s a lot of different moving parts in restoration.
The ultimate goal is to help get you guys paid. There’s always a constant battle to get paid, whether that be a homeowner hanging onto a check too long after they received it from the insurance companies. A lot of the times they had never seen such a big check before so they go pay off their mortgage or things of that nature that hurt you in the long run. Other than that, insurance takes a long time to pay. Helping, driving urgency with those folks, getting in front of them early, letting them know that you’re a professional contractor and you want to get paid as quickly as possible. That way you can move on to the next job and grow your business. That’s another challenge with just taking a long time for payment to come through that door.
These are some of the generic challenges. Everyone has different challenges. We take that into consideration. We want to learn what is important to you. These are just some of the main challenges that restoration companies face that we solve. We have invented and created a process that works. The way that we’ve done that is we’ve listened to the restoration companies. You guys are a very specific group. You’re not a supplier, you’re not a subcontractor, you’re working directly with homeowners in sensitive situations where somebody had just had their house flooded and it’s a complete loss and they’re devastated. We understand that these are sensitive jobs and you want to get out there to help them as quickly as possible. We’ve listened to you guys and we’ve created a process that other contractors are taking on and through these next couple of slides is how they do that and how they’re successful.
The first step to everything is setting the right expectations. You’ll be surprised in construction, communication and transparency is probably the two most things that are lacking in in a construction job. What you want to do is provide clear next steps and terms for that specific project. Make sure that you explain to your customer when you expect to get paid, getting all the insurance information, which is probably going be something that you already get, but we want to make sure that you let them know that you are obviously a professional contractor and you’re going to perform good work and you expect to get paid within the agreed upon terms. That’s expected. Unfortunately that never really seems to happen. We approach that and overcome that with sending preliminary notices.
A preliminary notice can be a term that is used in different states. It could be called a notice to owner. It can be called a notice of furnishing. It could be called a preliminary notice. Most of the cases, sometimes these are required, sometimes these are just completely voluntary, which we would call visibility documents to help create the transparency that’s needed to get paid faster.
What we found is, and what a lot of restaurant ration companies are doing is they’re sending preliminary notices once the job has been completed, not at the very beginning. You can very well do that, but what they found is when you send an preliminary notice at the very end of the job when you’ve completed it, that’s where you have your most success because it’s a reminder that you just completed the work and obviously you’re reminding them that if they receive a check, then it’s going to go to you as kind of a reminder that there’s money owed for that project.
Who you’re sending it to is up to you. Most cases, sometimes restoration companies are sending it to the owner. Sometimes they’re sending it to both the owner as well as an insurance adjuster. It’s completely up to you on how you guys want to approach this, but what the idea is, is you want to communicate to everyone that’s associated with this job that you’re a professional contractor, you expect to get paid and you’re essentially establishing your lien rights and the knowledge that you know what to do in case there is a payment situation. We understand that we don’t want to harm relationships, we don’t want to get bad referrals just by seeing a document. This is a very nonthreatening form. We also have a lot of tools that we can potentially, that we can show you that soften the blow a little bit and create a positive message around a preliminary notice.
Things like a cover letter. On top of our preliminary notice that you would send at the very end of the project once you’ve completed it, goes along with a cover letter. This is a document that you can create on your own with a certain message that goes on top of the form. What we’ve found is the way that they message this is, “Thank you for the business. We are owed x amount of dollars,” or, “If you receive a check from the insurance company, this is who you pay.” You can even ask for a referral or again, comment on working with them and thanking them for their business and moving on to the next job. It’s all about positive messaging and that reminder that hey, we are expected to get paid on this project. That’s setting the right expectations and the most important thing that you can look at to set the right expectations and to communicate is by sending a preliminary notice.
Now the second step is, is obviously we found that when people file preliminary notices, they’re able to get paid on about 33% of their jobs quicker. That’s very positive, especially when you guys are getting paid maybe around 40 to 60 to 90 days or even later. That’s impactful in itself. Now there’s a secondary document. If you file those preliminary notices, you set the right expectations. We want you to resolve issues before moving straight to a lien. That can be accomplished through sending a warning, which we call a notice of intent.
Now this is typically sent to both parties, the owner as well as the insurance company because you don’t necessarily know where the mix up is. You’re waiting on a check, you haven’t been paid. You want to loop everybody in on this. Now what it does is it warns the insurance company and the owner that you still have not been paid on this project and that you’re assumed to file a mechanics lien based off of that nonpayment. It’s an urgency driver, it’s a demand letter, it creates the urgency that’s needed to resolve the problems before an actual lien or a worse situation has to happen and it, in their eyes, seems like a way of you trying to work things out before just taking the ultimate drastic step to file an actual mechanics lien.
It is there to build relationships and to let people know, again, you’re ready to get paid. There’s no legal repercussions of this. Some states actually require notices of intent, so depending on your state some of these things may be required. It’s really effective in speeding up payments. Again, you’re letting them know that you have not been paid and you expect to get paid, which is obviously a positive and urgent message. It also can have the homeowner work for you. If it’s the insurance company that’s kind of hanging up or kind of dragging their feet on payment, they can work with you on trying to get these things resolved.
Here’s a customer of ours, Jim Bower, he works for a franchise PuroClean. He’s joined the Levelset team and he is very focused in filing preliminary notices and then if he has to, filing those notices of intent. What he has seen is, it’s created motivation, prompted people to take action. He’s had immediate returns where folks that have never answered their phones or never answered emails, they call you guys back. It’s kind of a funny comment where he’s like, would that be cash or card? Payments do come in very quickly by sending a warning, letting them know that you are serious and then you know they can’t call your bluff. You’re serious about the work that you’re doing.
The next step if you have to, this is kind of the worst case situation, is filing mechanics lien. Now we can help you file those liens. We have a thing, a saying around here is 100% of people hate filing mechanics liens. We understand that it’s a powerful tool. 66% or roughly people that actually do file mechanics liens will get paid on their jobs. It is an effective tool but again, we want to rely on preliminary notices and notices of intent to get you guys paid before a situation like this even happens.
The third step and most important one is you have the idea of helping speed up your payments with those documents. We offer something that will help you guys get paid a lot faster. I can show a little bit of this to you if everybody’s on board with that, but we want to talk about getting paperwork straight. There’s a lot of deadlines that are associated with these types of documents, preliminary notices, notices of intent, mechanics liens. Our system, when you have job information entered in there, will keep track of all the necessary requirements that your state requires, whether that be a 20 day preliminary notice or a 10 day notice of intent prior to a mechanics lien or 90 days from when you had last performed work yet to file on mechanics lien. There’s a lot of different moving parts, every state’s different. Our system will give you the tool to remind you of when these things are coming due. That way if you want to take action or if you need to take action, you have the right tool to do that.
We help file all the documents for you. This is a system that will keep you guys organized. Again, enter in information into our platform. You send the notices to the proper individuals like the owner, insurance adjuster and you want to communicate. Our system is a collaborative tool. It’s a comprehensive tool all in one place where you can keep track of your deadlines, file documents, and exchange other lien related documents like lien waivers, pay applications, those things that are necessary to do business with individuals.
Here’s a guy that I have met personally, Brian Daughtry. He’s an Ohio restoration company. He’s a huge advocate of Levelset and I’ll tell you why. He’s been with us about a year. A little bit over a year actually and he has seen a big impact with using these types of documents. He leverages the process of sending preliminary notices, notices of intent and he never really files actual liens because he’s getting paid before that. This is a powerful message because sometimes you don’t want to look like the bad guy with the insurance adjusters, but this is a good way of looking at it. The adjusters, when they get communication from Dry Patrol or our company with filing these notices, they understand that this company is handling these things differently, over the other 95% or whatever the percentage may be that doesn’t handle the process this way. They take you seriously. They understand that they have to deal with you differently. They can’t take advantage of you because of the lack of knowledge within lien rights, or what you can do to help speed up these payments.
It’s a huge impact. He’s seen some great success and this next that you’re about to see, when he came to us, he had a homeowner that held onto a check too long and he never wanted that to happen because it impacted his business in a very negative way. He was getting paid roughly around 90 days or so, which is an industry average. When you’re looking at restoration you just kind of assume that that’s the way of doing it. We want to teach you that you can get paid quicker. You can get paid within 40 days, 15 days, 30 days, depending on the situation. He had calculated where his aging was before using our before using or partnering with Levelset and he was getting paid around 90 days. Since then, come April of this past year, he had did some research, he was getting paid around 17 days.
If you can think of the impact that can have on your business and the cash that keeps filtering in where you can expand into other areas where you didn’t think you could, that’s what these documents will do for your company. That’s what they did for Dry Patrol in Ohio. I want to know that you’re not alone. Everybody has payment problems in some capacity. We want to make sure that we give you a tool and a process that is easy and has shown that it’s been effective through lien rights and other avenues. That’s kind of what we wanted to talk about regarding restoration. I’ll leave kind of some, the floor for any comments or questions because I want this to be collaborative. If you guys have anything that I can help answer, any concerns, please address them and would be happy to have those answered for you.
All right, well let’s show you quickly the system and if you do have questions, again, here’s my contact information. We will be sending this recording to you via email for the ones that have registered or the ones that weren’t able to make it. You’ll be getting this recording and you can obviously see my contact information. Would love to answer any questions that you guys may have that you don’t want to obviously comment here.
Our system is a comprehensive tool that makes this process easy. I want to note that this is flexible for each individual. It’s not something that has to be a standard way of doing it. If you wanted to handle, send more notices of intent or preliminary notices, we want to give you the tool to do that.
The main thing that we want to accomplish with this partnership is you want to get information into the system right when you get a job. That way you can be on your toes and be ahead of the payment problems rather than react to them. We just really need some core information, things like address, who your customer is, and some information about them. When you log in you’ll see a dashboard and the dashboard is pretty cool because you can see how many jobs you have in your account with us. Right now I have 36. Right now I have 36 projects where I am not paid on a project or I have a remaining balance so you can really get a high-level view of what’s going on in your system. As I mentioned, our system is built to track deadlines for you, whether that be a preliminary notice or a mechanics lien.
Here you’ll be able to see what projects exist in the platform that has some type of deadline approaching within 14 days. That’s very powerful. When you log in you can be notified or see that you have things that you need to do and actions that you need to take to be able to get ahead of the payment problem before filing a notice or filing a lien. That’s where you can keep track of your deadlines.
I’m going to go straight to a project that I’ve created for this webinar, just to show you kind of what a product would look like and how to get a notice sent as well as how to keep track of any required deadlines that the state requires. This is going to be a California job. Every state is different. Some states require preliminary notices for prime contractors. Some states just require a notice of intent. Pretty much every single state in general terms will require a lien being filed within a certain timeframe.
What you’re looking at now is a California job where you’re the prime contractor. Here’s all the details of the actual job. I’m going to show you how to keep track of any necessary deadlines and how our system gives you trigger actions as well as file a document really quickly and then we’ll wrap this up.
Over on the left hand side is the deadlines. We’re going to prompt you with any required steps that you need to take to be able to have lien rights or to send documents that you want to send based off of the process. Right now I have a preliminary notice, it’s telling me that I have a preliminary notice that could potentially be required on this project and preliminary notices are generally based off of the first day that you have supplied labor materials.
What you can do is you can plug in that date of when you had first provided or whatever the date may be asking for or when an estimated time may be and automatically our system’s going to assume that based off of this date you have 20 days to file this notice, because in California generally, a preliminary notice is going to be due within 20 days of first providing labor materials. Now that will keep track of the notice all the way down until it’s either due or you file that.
I want to file a notice. I really, I believe in notices. I want to make sure that I send a notice on this project to create transparency. What you would do is just create the document. Here’s the cover letter that you can customize as a message. You can see that Booth Construction is proud to be providing your services. This message can be customized to your company with your logo and whatever you guys want to put on there and some limitations. This is used to soften the blow a little bit, create the message of transparency, and communicating with your customer early on before they even go straight to the notice and kind of get a little bit alarmed why you’re sending that. This can be where you can ask for referrals, thanking them for the business, reminding them that there’s money owed for this project and I’m establishing my lien rights. You would just go through a couple of steps here, put in an estimated contract amount for the work that you’ve provided.
Let’s just say it was $5,400. It will ask you for a lender because in California if there is a lender involved in the project, generally that is when a notice would be required. It’s asking you for a lender in case there’s a financial services company behind the actual project. If you don’t have that information, something that we didn’t talk about, we do have a research team that’s there to find that information for you. If you don’t have that information you can just simply mark it as I don’t have this information. Our team’s going to go in and verify that stuff for you and fill in the gaps. If you do have it and if there is a lender on the job, we will cross reference any information that you provide. That goes for a lender, that goes for a property owner, that goes for anybody that is associated with the project. We have the capability of researching these things for you and you would just go to the next stage of this notice.
You can send notices in the mail as well as an email, depending on how they’re required to be sent. If you do have a property owner that you want to send a preliminary notice to and if you wanted to send it to the insurance adjuster, you can add in recipients as you go through the process and notify them of notices coming. We will send them in the mail for you. We handle all the preparation and delivery of each notice.
To finalize the document all you would want to do is hit create and at that point you’re finished. The idea is getting simple information about the product into the system, help us keep track of the deadlines for you based off of some certain dates of when you started and ended, and you click a couple of buttons and we handled the whole preparation and delivery of these notices for you and we keep all documents into the system in case you needed any record of it. If you needed to go in and find a notice or if you need it to prove that you sent a notice, you can always go in and access that document in your documents section when you need. You will have the ability to download, print it out to your computer if necessary.
That’s a very quick snapshot. Our system can do a lot more things. If you are interested, please contact me or reach out to our team. We would love to help you. A very quick snapshot of what our system does. There’s a lot of other capabilities that we can provide to you based off of automation, other avenues of keeping track of deadlines, so please let us know. Hopefully this was helpful. I will briefly pause. I’m going to turn off the video but I’ll briefly pause to answer any questions that you guys may have. If not I’ll wrap this up and get on with your day since I’ve taken a good bit of your time. I appreciate you guys joining. Hopefully, this was helpful in explaining how we help restoration companies. Hope to help you guys in the future. Again, please let us know if we can help you in the future.
I have a question here from Olivia and it states, “Do restoration contractors have lien rights?”
We work with a lot of restoration companies in the United States. Lien rights are associated with anyone that’s doing a project improvement or a permanent improvement to a property. When restoration companies come in, they are performing a service or an installation job and generally speaking have lien rights for those types of projects.
Related to this when deadlines are applicable; What’s the range for sending preliminary notices and notices of intent?
The range will vary based off of the state regulations. In some cases, they’re going to be within 20 days of first providing labor materials or of last delivery of labor materials. Again it varies based off of each state. If you’re working in different states that can be challenging to keep track of these lien rights for your jobs in calculating the deadlines, which is something that our system can help you do based off of where you’re working and the address that you guys are providing to us. But every state is different. It can … generally, it’s based off of the last day and the first day that you guys have supplied labor materials for the project.
All right, perfect. Well, I will wrap this up guys. Again, I’ll share my information with you one more time. firstname.lastname@example.org, two Rs, two Ts. You can either email me or call me. We’d love to help you answer any questions or if you have any specific things that I did not go over today and you’re interested in, please give me a ring. I would love to try to help you. I really appreciate the time that everybody’s spent with me today. Like I said, we’ll be sending this recording over to you and let us know if we can help.