The Restoration AR Playbook: Get Paid in 30 Days Instead of 90
Check your AR aging report right now. How much money is sitting in the 60+ day column?
If you're like most restoration operators, the number makes you uncomfortable. You've got $80,000, $150,000, maybe $300,000 in completed work that's been billed but not collected. You're running equipment, paying techs, covering insurance — and the carriers are holding your money.
You're not running a restoration company. You're running an interest-free bank for insurance companies.
This isn't a "billing problem" you can fix by hiring a collections person to make more phone calls. It's a systems problem that starts the moment you dispatch a truck.
You're Running a Bank — You Just Don't Know It
Let's do the math on what aging AR actually costs.
Scenario: You have $200,000 in receivables with an average DSO of 75 days.
- At 8% APR line of credit, that $200K sitting for 75 days costs roughly $3,300 in interest — per cycle.
- Money tied up in AR can't be used for growth: new trucks, better equipment, additional crews.
- Every hour your office manager spends chasing payments is an hour not spent on intake, scheduling, or customer service.
The goal isn't to "collect harder." It's to compress the timeline from job completion to cash in the bank.
Why Restoration AR Is Uniquely Painful
Other industries send an invoice and get paid in 15–30 days. Restoration doesn't work that way because:
- Multiple payers: Some jobs bill to the carrier, some to the homeowner, some split between the two.
- Carrier review cycles: Adjusters, desk reviewers, and payment processors each have their own timelines.
- Documentation dependencies: Carriers don't pay incomplete claims. Missing moisture logs = stalled payment.
- Dispute mechanics: When a carrier disputes a line item, they often hold the entire payment.
The AR Velocity Framework
Think of AR velocity as the speed at which money moves from completed work to your bank account. Velocity is determined by three phases:
Pre-Job: Set the Terms Before You Mobilize
AR problems often start before you've done any work. Every ambiguity at this stage becomes a dispute later.
Pre-dispatch checklist:
- Signed authorization to perform work (not verbal)
- Confirmed insurance policy number and carrier contact
- Deductible amount discussed with homeowner
- Direction to pay established (carrier pays you, or homeowner pays and gets reimbursed)
- Certificate of Completion language included in authorization
During Job: Document for Payment, Not Just Drying
Your techs' job is to dry the property and create a payment-ready file. This means:
- Timestamped photos of every affected area (before, during, after)
- Daily moisture readings logged in the CRM, not scribbled on paper
- Equipment placement records with dates and serial numbers
- Customer signature on authorization, scope confirmation, and completion
Related: Carrier-Ready Documentation
Post-Job: The 72-Hour Invoice Rule
Every day between job completion and invoice submission is a day you're not in the payment queue.
Target: Invoice within 72 hours of equipment pull.
Requirements:
- Estimator receives complete job file within 24 hours of completion
- Estimate is built and reviewed within 48 hours
- Invoice is submitted to carrier on day three
Related: Xactimate Estimator Throughput
The Collection Cadence (Day-by-Day)
Once the invoice is submitted, follow this cadence without exception.
COLLECTION CADENCE SOP — [COMPANY NAME]
Day 0: Invoice submitted to carrier. Log submission date in CRM.
Day 3: Confirmation follow-up.
Email: "Confirming receipt of invoice for [CLAIM #].
Please advise if any additional documentation is needed."
Day 14: First payment follow-up.
Call: "Checking on status of [CLAIM #], submitted [DATE].
Are we in the payment queue?"
Day 21: Escalation flag.
If no progress, request supervisor contact. Document in CRM.
Day 30: Formal demand.
Send written notice: "Invoice [#] is now 30 days past submission.
Please advise on payment timeline or disputed items."
Day 45: Dispute resolution pathway.
Activate Dispute Response SOP if payment is held.
Day 60: Collection escalation.
Engage collection partner or insurance receivable specialists.
Handling Carrier Disputes Without Losing Your Mind
| Dispute | Root Cause | Prevention | |---------|-----------|------------| | "Equipment days not justified" | Missing daily moisture logs | Automated log enforcement in CRM | | "Photos don't support scope" | Incomplete before/after documentation | Photo checklist required to close job | | "Labor hours excessive" | No time tracking on job file | Tech time clock integration | | "Line item not covered" | Scope not pre-approved | Pre-authorization for non-standard work | | "Price above market rate" | Non-standard pricing | Xactimate pricing compliance |
The Dispute Response SOP
DISPUTE RESPONSE SOP — [COMPANY NAME]
Step 1: Log the dispute (within 24 hours)
- Create dispute record in CRM
- Note: claim number, invoice number, disputed amount, items disputed
Step 2: Pull supporting documentation (within 48 hours)
- Retrieve job file
- Identify evidence supporting each disputed item
- Document any gaps
Step 3: Prepare written response (within 72 hours)
Subject: Response to Dispute — Claim #[NUMBER]
Dear [ADJUSTER NAME],
I am writing in response to your dispute of [DISPUTED ITEMS]
on claim #[NUMBER].
Disputed Item 1: [DESCRIPTION]
Our documentation supports this charge based on:
- [SPECIFIC EVIDENCE: daily moisture logs, attached]
- [IICRC S500 reference, if applicable]
Please review the attached documentation. I am available to
discuss at [PHONE].
Respectfully,
[NAME], [COMPANY]
Step 4: Submit response with attachments
- Send via carrier's preferred channel (portal, email, fax)
- Log submission date and method in CRM
Step 5: Follow up (7 days after submission)
- Call adjuster to confirm receipt and discuss status
Step 6: Escalate if unresolved (14 days after submission)
- Request supervisor review
- Document for relationship management if pattern recurs
AR Aging Dashboard: What to Track
Primary Metrics:
- Total AR outstanding
- DSO (Days Sales Outstanding)
- AR aging buckets: 0–30, 31–60, 61–90, 90+ days
Benchmarks:
| Metric | Poor | Average | Target | |--------|------|---------|--------| | DSO | 75+ days | 45–60 days | Under 35 days | | Invoice submission lag | 10+ days | 5–7 days | Under 3 days | | Dispute rate | 25%+ | 10–15% | Under 5% | | 90+ day AR | 20%+ of total | 10–15% | Under 5% |
Collections Health Checklist
Audit your current collections process:
- [ ] Every job has a signed authorization before work begins
- [ ] Invoices are submitted within 72 hours of job completion
- [ ] There is a documented follow-up cadence that runs automatically
- [ ] Disputes are logged and responded to within 72 hours
- [ ] I know my current DSO without pulling a report
- [ ] I can see AR aging by bucket in my CRM or dashboard
- [ ] I know which adjusters generate the most disputes
- [ ] Staff roles for collections are clearly defined
- [ ] Payment delays are escalated at defined intervals, not "when we remember"
If you checked fewer than six boxes, you don't have a collections system. You have collections hope.
Why Process Beats Persistence
The operators who get paid fastest aren't the ones who yell at adjusters. They're the ones whose files are bulletproof and whose follow-up cadence is automatic.
You can hire a "collections specialist" to make more phone calls. But if the upstream problems — documentation gaps, slow invoicing, no follow-up cadence — aren't fixed, they're just pushing water uphill.
The architecture matters more than the effort.
Related: Revenue Leak Diagnostic
Ready to plug the leak?
If you want this installed into your shop (intake → dispatch → job file → cash collection) without hiring more staff, I can help.