HVACR Business

SEP 2017

Help hvacr contractors master the critical components of business management.

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7 HVACR BUSINESS SEPTEMBER 2017 www. hvacrbusiness .com Several months later, during the bank- ruptcy proceedings, the HVACR contrac- tor got a notice to repay the payments made to them for work done on the project. e trustee was requesting a check for approxi- mately $60,000 — the value of the checks received for work that had been done in the past 90 days. is would be a significant im- pact on the company's cash flow. In conversations with his attorney and the bankruptcy trustee, the HVACR con- tractor learned that the bankruptcy court has the right to request return of payments made to vendors for up to 90 days prior to the bankruptcy filing. e trustee didn't care about the impact this would have on his company's cash flow. He only cared that he received the check. e HVACR contractor set up pay- ments with the trustee to pay the $60,000 into the bankruptcy court … and it an- gered him every time he wrote a check. Yes, he did get some of it back, months later. But no, he didn't get all of it back. e HVACR contractor's money got dis- tributed to the attorney and other vendors owed by the GC who went bankrupt. You can protect yourself from this sce- nario by implementing the following com- pany procedures: • e fact that the HVACR contractor's bookkeeper was persistent in collect- ing the funds owed to them actually backfired in the end. It's best to keep a cash reserve to ensure that a repayment won't hurt your company. • Make sure, whenever possible, the con- struction jobs are bonded (i.e. ensured that if the GC can't pay, the bonding company will pay). If this job had been bonded, then the bonding company would be responsible for payment in bankruptcy court. • Check out the financial condition of a company prior to agreeing to work for that company. Even if a company is known, if that company goes bank- rupt, your company may have to repay the bankruptcy court any monies re- ceived 90 days prior to the bankruptcy filing. Build and keep a cash reserve in this amount as your company is work- ing on the job. • Collections are critical to cash flow. If a payment has not been received in the time allotted for payment, the bookkeeper must make a call the next day to find out when a payment can be expected. If you don't get a check, stop work. It's difficult, but necessary, to do this. u Ruth King is president of HVAC Channel TV and holds a Class II (unrestricted) contractors license in Georgia. She has more than 25 years of experience helping contractors, distributors and manufacturers grow their companies. If you'd like free a copy of the bookkeeping test and answers, send her an email at rking@ontheribbon.com. THE LIGHTWEIGHT YELLOW JACKET ® YJ-LTE ™ REFRIGERANT RECOVERY SYSTEM The YJ-LTE Refrigerant Recovery System is nothing less than the smallest, lightest and most powerful unit in its class. There's never been so much time, and cost-saving innovation packed into such a compact, small package. We're talking built-in purge circuit, superior condenser performance and single valve operation. It may be small, but it's built to handle the biggest (and tallest) recovery jobs you can throw at it. FIND OUT MORE AT YELLOWJACKET.COM. EVERY STEP UP IS ANOTHER REASON TO LOVE THE COMPACT, LIGHTWEIGHT YJ-LTE. Made in the U.S.A. THE LIGHTWEIGHT YELLOW JACKET ® YJ-LTE ™ REFRIGERANT RECOVERY SYSTEM The YJ-LTE Refrigerant Recovery System is nothing less than the smallest, lightest and most powerful unit in its class. There's never been so much time, and cost-saving innovation packed into such a compact, small package. We're talking built-in purge circuit, superior condenser performance and single valve operation. It may be small, but it's built to handle the biggest (and tallest) recovery jobs you can throw at it. FIND OUT MORE AT YELLOWJACKET.COM. EVERY STEP UP IS ANOTHER REASON TO LOVE THE COMPACT, LIGHTWEIGHT YJ-LTE . Made in the U.S.A.

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