Liens Slowing You Down? Speed Up Cashflow with Early Communication
Ever feel like your cash flow is stuck at the starting line with no end in sight?
For businesses that rely on consistent cash flow, having capital tied up in liens is like trying to sprint through mud. It slows everything down, piles on stress, and can even make you miss out on growth opportunities.
The True Cost of Liens
Imagine tossing 30% of your working capital into a black hole – that’s what liens can feel like.
According to industry information, a typical self-storage facility has between 3% and 7% of its units in a lien status. Sounds acceptable, right?
Actually - on average, a massive 30% of a business’s working capital can be stuck in lien limbo.
That’s not just inconvenient—it’s expensive.
Beyond the obvious financial drain, there are hidden costs: administrative time spent chasing payments, opportunity costs of capital that could be fueling growth, and the potential damage to customer relationships.
So, what if you could cut those liens in half and get your capital moving freely again?
Good news—you can.
How?
Early communication.
Businesses that get ahead of the collections process free up substantial working capital, reduce administrative headaches, and, yes, slash liens by up to 50%.
The Early Communication Advantage
So, what exactly is “early communication”?
It’s about reaching out before liens become a problem—using proactive, friendly, and strategic messages to resolve payment issues fast.
Effective channels include:
SMS: Short, sweet, and effective. Payment reminders via text speed things up significantly.
Email: Write messages that actually get read. Widely accessible, automated, and suitable for detailed messages and links.
Digital Payments: Convenient links in messages make it easy for customers to clear balances.
Phone Calls: Old school and effective, especially for higher-value accounts.
Direct mail: Perfect for customers who don’t regularly check their email inbox.
And for those two-letter states (looking at you, TX and NY) with their own lien quirks, tailoring communication to match state-specific regulations is critical. Ai Lean takes the guesswork out and keeps you compliant.
Implementation Strategies That Work
Ready to revamp your lien management and early communication strategy? Here’s a step-by-step approach:
Map Out Your Timeline: Identify when payments usually lag and schedule outreach before things get tardy.
Automation is Your New Best Friend: Platforms that automate reminders and payment options are lifesavers.
Personalize Your Messages: A little customization (like addressing customers by name or referencing specific projects) goes a long way.
Measuring Success
It’s not enough to just send messages—you need to track what’s working. Key metrics to keep an eye on include:
Lien Reduction Rate: Aim for that 50% target.
Days Sales Outstanding (DSO): Shorter is better.
Response Rates by Channel: See which methods get the best results so you can improve your strategy over time.
By calculating freed-up capital and watching these metrics, you can prove the ROI of early communication to even the most skeptical CFO.
Common Obstacles and How to Overcome Them
Of course, no strategy is without its bumps. Common roadblocks include:
Team Resistance: Make the process simple and use data to get buy-in. Show your managers how early communication is impacting revenue each month.
Scaling Challenges: Use automation tools to handle outreach as you grow.
Customer Pushback: Frame communication as a courtesy, not a hassle.
A little change management goes a long way here.
Getting the team on board is crucial for success.
Conclusion: Free Your Capital, Free Your Growth
In a world where cash is king, having your capital trapped in liens is a nightmare.
But early communication can make sure that the risk of a default never becomes a reality.
By reaching out proactively and early, you can reduce liens by up to 50%, speed up cash flow, and get back to focusing on growth.
Ready to get started?
Try implementing one simple change today—like automated payment reminders—and see how quickly it makes a difference. The future of collections management is proactive, not reactive. Don’t get left behind.
Your Lien Busting Quick-Start Checklist:
✅ Automate SMS reminders for payments due.
✅ Set up digital payment links in messages.
✅ Personalize communication for key accounts.
✅ Track key metrics like lien reduction rate and DSO.
In the fast lane of business, you can’t afford to get stuck behind slow-paying customers. Early communication reduces liens and puts your business miles ahead of the competition.
Why wait?
With just a few tweaks, you can start freeing up capital—and your peace of mind—faster than you think!
Source:
Delinquencies, Collections and Liens, Inside Self Storage, February 2000.
Continue Reading
