Hey Thea,
How do you respond to a past-due customer who gets upset with you for contacting their customer? Before placing a mechanics lien on a past-due account, we have to do a Notice of Intent in our state, so it shouldn’t be a surprise to anyone. The customer told me “It is MY bill, so don’t contact my customer again. I will get you paid.” These aren’t my rules to secure our lien rights, it’s what’s required by state statute. Am I wrong here?
— Liening Tower of Lumber
Dear Liening,
That you are asking, “Am I wrong here?” tells me this blowhard got in your head. Is he paying rent? NO, that’s the problem, he’s not paying you for anything. Kick him out! The mere mention that you are at the point of filing a lien against the property is an indication that the bloom is off the rose with said “customer.”
Filing a lien is not a credit manager’s first “go-to” move. Ironically, it creates more work for us and is a giant pain. The fight is not just with the customer, but with sales, the property owner, and anyone else who suddenly decides they need to throw their hat in the ring and be a part of this battle. Everyone sings the phrase, “We have lien rights,” but goes intoanalysis paralysis mode when it comes to actually filing it.
The road that leads to the infamous “Filing of The Lien” is paved with phone calls, texts, emails, and a barrage of discussions filled with words and phrases that are creative, varied, and often obscene. To quote a colleague, “Everyone wants to go to the parade, but no one wants to clean up after the elephant.”
Responding to your customer’s comment is a tongue-biting event. The comment conveys a lack of education on their part. Most contractors, people in the construction or building materials industry, and some credit managers simply don’t understand the process or the legalities of securing your lien rights.
A concise response is always best: “We appreciate that and we look forward to receiving your payment; In the meantime, it is our policy to not lose lien rights. We will need to have payment in full by XX date or we will have to file a lien.” Then take a breath. They may already be talking over you or summarize their thoughts and hang up. They may continue to push their POV, but stick to your script. There is no easy way to have this conversation, but I can guarantee that avoidance is just prolonged suffering disguised as temporary relief and hope.
It is difficult and uncomfortable to deliver news no one wants, both with the property owner and the contractor. But if you think having uncomfortable conversations is hard, wait until you see the results of not having them—a missed opportunity to avoid bad debt. Remember what your role in the company is: To protect and collect your company’s money.
Your customer will often call their salesperson and express their displeasure. Then said salesperson will call you. This is your chance to educate. This won’t be the first or last time you have this discussion. You will explain the lien process, the requirements, and that it is statute driven until the day you retire to everyone … customers, property owners, your leadership, and salespeople.
You didn’t create the customer’s inability to pay or lack of knowledge about their chosen industry, but you can dispense some wisdom. Just think, if cauliflower can somehow become pizza crust, you can stand your ground on liens.
