Many contracting companies across the nation are watching with dismay as their accounts receivable climb out of the normal comfort zone.
For any business, every penny counts whether times are good or bad. Probably nowhere is this mindset more prevalent than in the construction industry, where low profit margins require contractors to protect working capital any way they can. Their success, however, often depends on whether they have an effective billing and collection system. Without one, a contractor’s cash flow can quickly turn sporadic and unpredictable. That almost always leads to a siphoning of cash reserves, which in turn leaves a contractor with insufficient working capital and often no recourse other than to seek hard-to-obtain – and increasingly expensive – loans.