Fraud has been and remains a challenge for contractors. Credit Safe, a credit reporting company, recently stated that 41% of businesses across the country have been “hit” at least seven times by some type of fraud issue.
How to Address Fraud and Slow Money
Thanks to a perfect storm of high interest rates, a slow housing market and an election year, incidents of fraud and customers taking their time making payments are on the rise. To help combat these business-slowing challenges, we speak with Thea Dudley, CEO of Pocket Protectors, for tips on short-circuiting scams and ways to speed up the payment process.
Pair that with payments that take forever to arrive and distributors are struggling when it comes to collections. Thankfully, RC knows exactly who to turn to for answers.
In this episode, Group Publisher Jill Bloom speaks with Thea Dudley, CEO of Pocket Protectors — known throughout the industry as “The Credit Overlord” — to discuss overcoming these two distinct issues.
The two issues shaping the landscape now, as Dudley mentions, are fraud and slow money with fraud being outlined first. The most common culprits are:
- Check theft
- Scam emails
- Fake Vendors and Invoices
While not a silver bullet, Dudley says payment portals can alleviate many of these problems. If a contractor hasn’t already adopted one, they need to do some research and find one that works for them.
“If you have not bit the bullet and gotten an online payment portal, eliminate the post office as much as you can,” she said. “The best thing you can do is find a way to do it online. And there’s so many options.”
For the other two issues of emails and fake vendors, Dudley offers the tried-and-true advice of slowing down and examining emails. Look for strange email addresses and inconsistencies, especially if an email sounds too good to be true.
“They’re getting slick … you used to be able to go, ‘Well, the grammar in here is terrible,’ and now it's, you know, everyone's discovered spell check now … we're all on the same playing field,” Dudley says.
Dudley also covers how to deal with “slow money,” noting that payments have continued to slow down, especially when customers insist on using more traditional methods like mailing checks.
All of this is compounded by higher interest rates, a slowdown in housing projects and the presidential election, making her best practices all the more crucial for distributors and contractors alike.
“You've got housing that's still lagging a little bit. Interest rates are still high. And then everybody's a little nervous not knowing what's going to happen with the election. They're hanging on to their money,” she said. “Less projects means more competition, and everyone's fighting for those jobs, which then kind of drives the pricing down for things, which I don't understand.
“We get a little cutthroat, and everybody makes less money, but reduces profit, and then there's less money to pay your suppliers.”
Watch the full video here or download the podcast version here. For more information, visit pocketprotectorsllc.com.
