Basically because a couple of weeks ago two pieces of information were received mentioning them.
The first had information about a cloud-based lien rights management platform called zlien which counts Graybar as one of its 10,000+ customers.
Some key points in the press release included:
Lien waivers are exchanged thousands of times each day by parties on all sides of construction payments. Current exchange processes are inefficient and paper heavy, and the complexities associated with lien waiver transactions slow down payments and expose companies to expensive risks.
\”It\’s about time for a tech solution to the lien waiver problem. Lien waivers are key components of every construction payment transaction. The construction technology industry has been exploding recently with the emergence of job site apps and project management platforms, and now lien waivers finally have their solution.\”
zlien\’s new Lien Waiver Exchange tool is the first public and completely free collaborative lien waiver product that\’s easy to use by everyone in construction – from property owners and lenders to general contractors and subcontractors to material suppliers and equipment renters.
zlien enables construction companies to easily manage their mechanics lien rights. Over 10,000 users use zlien to secure payment by sending, filing, and tracking mechanics lien-related documents with ease and confidence. Last year, the zlien platform processed more than 250,000 projects and secured over $4 billion in contract value.
The cost is $179-699/month depending upon the number of states and users.
And then there was this article titled \”Why Liens are a Dealer (Contractor) and Distributor\’s Friend\” in ProSales Magazine.
The article is essentially a letter asking the writer to explain to sales organizations why liens can be good (and why not to fear them … and remember, sales\’ fear is usually generated by a lack of knowledge, hence lack of confidence in convincing someone of something.)
- One of the keys? Let the credit manager present it to the customer. Think if the credit manager said \”It is OUR customer, and why don\’t you stand back and let me do it for you?\” They understand liens and can talk the contractor\’s language and explain the benefits. Credit being an asset to sales? (I used to have a client whose credit manager understood the contractors\’ business, regularly interacted with customers, was empathetic to them (and friends with some) and was valued by the distributor\’s salespeople. If sales management is supportive, this can be a win-win for a company.
- \”Here are 7 benefits:
- Benefit #1. Securing lien rights allows you to extend credit to a customer who wouldn\’t be able to get credit terms otherwise.
- Benefit #2. For customers with a limited credit line, securing lien rights on a job allows you to extend additional credit to your customer.
- Benefit #3. For customers with large lines of credit, securing your rights allows you to keep jobs separate and extend terms to \”fit\” the type of job being done.
- Benefit #4. If for whatever reason the money hits a bottleneck and your customer isn\’t getting paid, having secured those lien rights allows you the opportunity to call the owner and inquire about the holdup.
- Benefit #5. If the answer isn\’t to your liking (i.e., you don’t get paid) you can let the owner know you intend to \”perfect\” said lien. You become the bad guy, pushing for payment while your customer can retain their customer. (Note: Depending on the circumstances this may be a plus or a minus.)
- Benefit #6. Securing lien rights offers protection for the project owner as well. It allows them to know who is on their project and verify payment through lien waivers.
- Benefit #7. Liens give you the opportunity to educate your customer on the benefits of using lien rights and encourage them to use that protection themselves.\”
- The fear of using lien rights comes from lack of education and understanding of what exactly they are and what they can and can\’t do.
It\’s great to increase sales but the key is those sales need to be profitable and nor can it be treated as a sale until money is collected. In an industry with low net margins, cash flow is critical … bills need to be paid.
What is the relationship between sales and credit in your company? What is your experience with using liens?