Posted by The Restoration Entrepreneur
Floating construction costs, and waiting 60 days for payment can be a company killer!
When should you expect to get paid? BEFORE the job ever starts! “Oh, yes! Great idea,” you say, “but how do I pull that off?”
Insurance companies have an automatic trigger to pay the ACV portion of the payment when the repair estimate is approved. Its a common trigger in their process. If the adjuster writes the estimate, they produce the payment almost immediately because that estimate is considered approved. If the contractor writes the repair estimate, the ACV payment is triggered when estimate approval occurs. Knowing this, you can implement a system to get that money before you ever begin the work. The Actual Cash Value (ACV) typically represents about two-thirds of the invoiced amount. It isn’t sent for the customer to hold until the job is completed. It is intended to be passed to their contractor to start buying materials and paying for labor to get their job done. You should expect your customer to release this payment to you upon receipt! Stop spending your money to fund rebuilds and get that ACV payment upfront!
Reference: The Business Transformer – Double, Even Triple Your Business in 18 – 24 Months