Torrington Supply hosts seminar on collections management

 

BY MARY JO MARTIN

Editorial director

 

In an effort to strengthen its customers’ business practices, Torrington Supply Company sponsored a seminar on collections management for hvac and general contractors, builders and remodelers, plumbers, and electrical engineers.  The seminar — co-sponsored by A.O. Smith Water Products — focused on preventing collection issues along with handling and recovering from a debt should one arise.

 

Waterbury, Conn.-based Torrington sponsored a similar course several years ago, and it was well-received at the time. According to credit manager Cheryl McPhail, many of Torrington’s customers are experiencing unprecedented problems with collections and the company felt it was the right time to step in with some added support. “Collection issues are seriously affecting our customer base,” she said. “Many of them have never had to deal with collecting on bad checks, filing mechanics liens, filing small claims or just making collection calls. In light of that, and considering the current economic and credit environment, we wanted to provide our customers with the knowledge and tools to assist them in protecting their businesses.”

 

Director of sales Christopher Fasano added, “We looked at the two areas where our customer base is feeling the pain right now — generating sales and collecting for their services. We focused on collections immediately because when our customers get paid, our customers’ business’ remain strong.

 

“Our customer base is having a difficult time right now. Their customers are facing tough situations — some lose their jobs after their projects have started, others have basic plumbing and heating needs that they just cannot afford. When these situations arise, it puts our customers at risk for bad debt.”

 

Unfortunately, a similar scenario is playing out in many other parts of the country. When these issues arise, and contractors are not fully knowledgeable about ways to protect themselves, it not only affects their ability to be profitable, but can put their businesses in jeopardy.

 

“Our customers have seen just a drastic change in payment patterns, and so quickly that many of them are unprepared to weather the storm,” McPhail noted. “They are not getting paid for the work and services that they provide, and at the same time the credit environment has tightened so drastically that getting a line of credit at the bank is not a viable option.”

Fasano added, “The most difficult consequence is that when contractors cannot collect for their services, they can no longer afford to pay their employees and their suppliers. It becomes a huge mess. We just want to be there to support them in their efforts.”

 

Critical advice for contractors

 

The dinner event, which drew 65 customers, was held at John J. Sullivan’s restaurant in Ansonia, Conn. There was no charge to attend.

 

Among the members of the Torrington team on hand were Fasano, McPhail, director of marketing Manny Salinas, coo and president Barry Wolff,  director of corporate operations Mitchell Miller, cfo David Petitti, regional branch manager Eric Weyler, branch manager Mike Crane and outside sales team members Pat Kennedy, Tony Brown and MaryAnn Parizo, who accompanied their customers. Wolff formally welcomed all attendees and introduced the presenters for the seminar, Tom Sansone and Jason Gagnon.

 

Sansone and Gagnon are attorneys with one of the leading Connecticut law firms, Carmody & Torrance. They worked closely with Torrington’s McPhail and Dave Petitti to craft an agenda that would provide a lot of useful information in a relatively short period of time - as well as one that promoted interaction between attendees and the presenters. Many attendees took advantage of the opportunity to ask questions during the presentation.

 

“We strove to avoid discussing a lot of complex legal concepts and theory, and tried to confine our presentation’s elements to practical, common sense points that the attendees would find useful in their own day-to-day business activities,” Sansone explained.

 

The agenda was divided into four components:

 

• Preventive measures to avoid some of the common problems that contractors encounter with customers who pose a genuine risk of nonpayment for the services provided. 
• How to manage the relationship with customers by utilizing “best practices” when providing service to them. 
• What contractors can do in those situations where, despite utilizing appropriate preventive measures and engaging in best practices, their customers nevertheless default on payment arrangements.  In particular, the use of mechanic’s liens, claims under bonds for public projects, conventional lawsuits and small claims proceedings. 
• Relevant topics of the federal bankruptcy laws, emphasizing how best to protect one’s rights when a customer files for bankruptcy protection. 

 

According to Sansone, “there was a lot of interest in the use of web-based search engines as a means of checking on the financial health of prospective and existing customers. The attendees were also very interested in the steps for properly recording a mechanic’s lien on a nonpaying customer’s real estate.  And, of course, bankruptcy is always a hot topic these days, given the current economic climate.”

 

Among the attendees were Frank Russo from Ralph Russo Plumbing & Heating and Emilio Espejo, vice president-sales & project management from m&o Corporation. Both agreed the session was a very valuable experience and covered every basic aspect of the collection process.

 

“I found the collections seminar informative, interesting and easy to understand. It’s nice to know we have a supplier that cares and offers the help we need to survive in a poor market,” noted Russo.

 

Espejo walked away with a new knowledge of what is important in running a contracting business:  “As contractors, we tend to believe that selling is more important than collecting. In reality, it is the other way around. A smart contractor needs to be educated on “self-help” remedies like the ones presented at the seminar in order to minimize costs incurred in professional legal counsel.”

 

Along with the discussion on collections management, Brian McBride, sales manager for Emerson Swan/A.O. Smith, spoke about two new products — tankless water heaters and a high efficiency water heater  (96% efficient). 

“Our customers need these kinds of products to help them sustain their businesses because at some point, it all becomes about price,” Fasano noted. “With innovative products, contractors can differentiate themselves and rise above the price criteria.”

 

This is one in a series of seminars Torrington Supply Company is developing for its customers. The company hopes to partner with other vendors on future seminars. “Our customers gave us excellent feedback on this event,” said Salinas. “We will be using other topics suggested by our customers for future seminars.” Salinas thanked A.O. Smith for co-sponsoring this event.

 

McPhail added, “Torrington Supply strongly believes that anything we can do to assist our customers with their businesses strengthens our relationship. We received tremendous feedback of appreciation that we would offer such an event.”