Skip to main content

The Globe and Mail

Roofers World and 15 ways to collect receivables

Alastair Samson, executive VP of Roofers World, gives some best practices, 15 ways to improve bill collection.

Brigitte Bouvier/Brigitte Bouvier

Dramatic images on Roofers World Inc.'s website show what can happen when too much snow and ice accumulate on a roof. Cars get crushed. A photographer nearly suffers the same fate trying to film a Niagara Falls of snow cascading off one roof.

The company sells snow guards to prevent roof-top avalanches. It has installed more than 800 kilometres of its guards on the roofs of such clients as the Department of Defence, provincial airports and national retail chains.

Roofers World has been selling directly to contractors, architects, designers and installers for more than 25 years. It also serves retailers. But homeowners, too, can browse and shop for anti-snow measures on the company's website.

Story continues below advertisement

When the recession hit, Roofers World was not immune. It took defensive financial action to avoid getting snowed under as the economy contracted. The Ottawa-based company says it drew on a number of management initiatives. One of the more noteworthy was a move that kept accounts receivable from piling up and becoming a drag on cash flow.

The company designs, makes and distributes other roofing products, many with rather evocative names: the Red Ripper tool for scraping off shingles, Eternabond tape for sealing roof leaks, Banana Knives for cutting shingles, Leaf-Defier gutters, and roof anchor/restraint systems to keep window washers, painters and other workers from falling off buildings.

The company's customers like to stock their shelves in the winter months, and booking programs typically offer extended terms. "But before offering our new winter booking program, we negotiated a product discount in lieu of extended terms," vice-president Alastair Samson says. "This had a very positive impact on our cash flow."

Historically, Roofers World incurs a loss in the first quarter which, in combination with the extended terms (60 days), stressed their cash flow. The product discount "saw improved sales which, combined with faster payments, eased us into Q2 with positive cash flow," Mr. Samson reports.

The company also took other measures. One was intentionally reducing sales in product lines where payment was slower. Another was paying attention to the basics: "We stayed more focused on making sure invoices get out on time and that there are no errors that could cause delay in payment," Mr. Samson says.

15 ways to improve bill collection

When looking to maintain their cash flow during the downturn, Roofers World made collecting their bills a priority. Several books, articles and websites offer advice on what businesses can do to collect - prior to calling the collection agency.

Story continues below advertisement

1. Head off collection problems by screening customers carefully. Check with credit bureaus such as Equifax or Dun & Bradstreet. Get references. Speak to suppliers about the payment practices of a potential business customer.

2. Equip your sales force with mobile payment systems. Give them cellphones and Bluetooth devices that allow credit cards to be swiped or credit-card numbers to be entered at the point of sale.

3. Make it easier for customers to pay. Prominently display on your website a variety of online payment methods such as Google Checkout, Bill Me Later and PayPal.

4. Charge a high rate of interest on overdue balances, say 10 per cent. On bills sent out to customers, warn about the interest rates that will be applied.

5. Make a standing offer of a rebate for early or prompt payment. Or, like Roofers World, offer a rebate on an "as-needed" basis. Relatedly, offer a preferred customer plan where the perks can be withdrawn for untimely payment of bills.

6. Tighten up credit practices. Get credit card numbers on file. Convey to customers that there will be substantial fees for bounced cheques. Get co-signers for large loans. When the economy begins to tank, quickly rein in sales on product lines where payments come in slowly, and trim the creation of credit accounts.

Story continues below advertisement

7. Enlist the assistance of the sales force. Tap them for intelligence on customers and market conditions. Make commissions contingent on receiving payment for a sale. Involve them in approaching late payers, perhaps as the "good cop" to the "bad cop" from the collections department.

8. Set up a proper credit collection system. Make someone in the company responsible for tracking and collecting receivables. Select them for their aptitude for the job and train them in collection techniques.

9. Respond promptly to missed due dates. Send a written reminder as soon as payment is late. Let customers know you are serious about getting paid. The longer non-payment goes on, the harder it becomes to collect money.

10. Leave your baseball bat at home. Contact with customers should be civil, especially in the beginning. Confrontational techniques can be counterproductive. Lack of payment often reflects a personal hardship or unintentional failure to pay. A courteous, empathetic approach is often better for arriving at a solution.

11. In cases where non-payment is not deliberate, offering payment options - such as instalments in varying amounts and frequency - may work. People tend to co-operate more when they are given choices. If the customer is verifiably in dire straits, a portion of the debt can be forgiven upon receipt of the remainder.

12. For more deliberate forms of non-payment, create a set schedule for escalating demands. The first reminder could be followed by a series of more substantial requests, both written and over the phone. They should convey how the collection effort will be escalated, including warnings they will be reported to credit bureaus and/or turned over to a collection agency.

13. Learn the techniques professional debt collectors use when communicating with persons in arrears. Michelle Dunn, a former owner of a collections agency, offers insider perspectives on her website at - as well as in her guides to collecting overdue accounts.

14. If you are a small business, consider going to small claims court. In Ontario, amounts as large as $25,000 can be adjudicated. But be prepared for delays and fees that could amount to more than $100.

15. Create a paper trail. Start with the sale itself: formalize it in a written agreement. Then make sure there are written reminders to pay. If matters end up in court, the paper trail will support claims for payment.

Report an error
Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.