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Set point: No account goes more than 45 days out from the date of invoicing without you taking action.
Did an account go over 60 days from invoicing? Send the demand letter.
Correction protocol: For all accounts at least 45 days old, take the following steps:
Did an account go over 90 days from invoicing? File the lien, bond claim, or other lawsuit.
• At 45 days from invoicing, call and email your customer and ask politely for payment, letting them know that your company expects to be paid for its work, and soon. • At 60 days from invoicing, send a polite but firm letter letting your customer know that if payment doesn’t come soon, you will be filing a claim to collect. • At 90 days from invoicing, file a claim, whether it be a mechanic’s lien, bond claim, or “vanilla” lawsuit — and be sure to check your filing deadlines! That’s it! You now have your plan. Here’s the secret and powerful benefit of establishing set points and correction protocols — you can now let go of the stress and mental clutter of worrying about your goal because you have already decided on a plan for what to do when things go “wrong.”
Are you worried that this correction protocol would be too aggressive? Well, the alternative is letting your goal boil like a frog. If you let unpaid money go 60 days, then 90, then 120 out, your lien and bond rights start to disappear and your leverage incrementally declines. Then, after six months or a year — during which you have had to do without the relevant payment — you start thinking, “Well, 75 cents on the dollar wouldn’t be so bad. At least I could cover x or y expense now.”You deserve better! This method of set points and correction protocols works for practically any aspect of your life or business. For example, I set a goal to read 50 books in 2018. My set point was finishing one book per week, and my correction protocol was to read through every day at lunch until I finished the book I was reading. It worked! As of the end of November 2018, I had read 47 books in 2018.
Did an account go over 45 days from invoicing? Make the call.
For your construction business, you must be the judge of goals and set points, but to learn about some key correction protocols for getting paid on construction projects, read my book, “The Subcontractor’s Roadmap to Getting Paid for Extra Work” Get your free copy today by emailing me at jwyatt@harrisonlawgroup.com .
-Jeremy Wyatt
*Credit where credit is due: I first learned about set points and correction protocols from reading Vishin Lakhiani’s book,“The Code of the Extraordinary Mind.”It’s worth a read.
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
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