CASE STUDY – SHAW INDUSTRIES INC.
HOW SHAW INDUSTRIES INC. AT MINIMAL EXPENSE SENDS
NOTICES TO OWNERS AND PROTECTS ITS ACCOUNTS RECEIVABLE AND
LIEN RIGHTS ON THE SALE OF ITS FLOORING PRODUCTS
CUSTOMER BACKGROUND
Shaw Industries, Inc. and its subsidiary entities (“Shaw”) supply carpet, hardwood, tile and stone, synthetic turf and other specialty products for residential and commercial markets worldwide.
Several years ago, Shaw became a wholly owned subsidiary of Berkshire Hathaway, Inc. Shaw’s home office is located in Dalton, Georgia.
A large volume of Shaw’s products is sold in the US, and used in the construction of buildings and other improvements of real estate.
THE CHALLENGES
PROVIDING A NOTICE TO OWNER REQUIRED BY A MATERIALMAN’S LIEN STATUTE.
Every state in the US has a materialman’s lien statute.
Each of these state lien statutes provides if you perform work or provide materials for the construction of buildings and other improvement of real estate, you have a right to file a lien in order to get paid.
The lien obligates the property owner and other parties to be responsible for the material and labor.
However, in order for the lien to be valid, the state statutes require you must first give a preliminary notice in a specified number of days after the materials are supplied or the work is performed.
This preliminary notice is called a “Notice to Owner,” and must be given to the parties as directed by the state statute, such as to a property owner, a contractor and any sureties.
If the Notice to Owner is not given as required by the statute or given incorrectly, any lien filed against the real estate will not be valid.
SHAW’S SALES VOLUME OF FLOORING MATERIALS CHALLENGED MANAGEMENT’S ABILITY
TO SEND THE REQUIRED NOTICES TO OWNERS WITHIN THE REQUIRED TIME.
Shaw’s volume of sales during the last several years placed a huge demand on management to monitor and send the required notices to owners.
THE SOLUTION
THE WEB BASED SOFTWARE PROGRAM DEVELOPED BY CREDITHAWK SYSTEMS, LLC, NOW KNOWN AS LIENSAFE, LLC (“CREDITHAWK” AND “LIENSAFE”) MONITORS, PREPARES AND SENDS BY US CERTIFIED MAIL THE NOTICE TO OWNER REQUIRED BY THE APPLICABLE STATE STATUTE AND ALSO PREPARES ANY NECESSARY LIEN.
Working with Shaw over eight years, LienSafe developed its SaaS (“Software as a Service”) program for the monitoring, preparation and sending of Notices to Owners and lien filings.
LienSafe’s software program does the following:
The data on Shaw’s sales of flooring materials are digitally collected from Shaw’s internal databases with full encryptions and safeguards.
LienSafe prepares daily and weekly information shown on the program dashboard so Shaw’s management can select whether a Notice to Owner should be sent by LienSafe on a specific project.
After direction by management, LienSafe automatically prepares the state specific Notice to Owner and mails it by USPS Certified Mail with electronic return receipt requested to all required parties, and then monitors the delivery to each party.
THE RESULTS
REAL TIME ACCESS TO PROJECT AND PAYMENT INFORMATION.
Since implementing LienSafe almost eight years ago and using its SaaS program, Shaw has had a dramatic improvement in its ability to access project and payment information.
Now, information needed to make timely decisions can be accessed literally at the push of a button.
Bonny Russell, Operation Leader since 2015 for Shaw’s subsidiary Spectra Contract Flooring, Inc. in Orlando, Florida, indicated that before LienSafe, “I would send out 13 and 20 notices a week, so I cannot imagine writing them out by hand, mailing them, and then having to keep track of who got what and when.”
After LienSafe’s SaaS program was fully installed, Russell commented: “LienSafe gets a file dump of all our active jobs on nightly basis, loads the data onto the website and develops the lists of project jobs I should be sending notices on. All I have to do is log in and click a button to see the list. I simply give my approvals and LienSafe takes it from there.”
IMPROVED EFFICIENT SELECTION, PREPARATION, SENDING AND TRACKING
OF ALL NOTICES TO OWNER AND FILING OF LIENS AS SELECTED BY SHAW.
Shaw sells its flooring products in 26 states in the United States. Each of these states has its own materialman’s lien statute.
The state requirements needed by LienSafe’s customers are included in LienSafe’s SaaS program so all Notices to Owners are sent as required, and all liens can also be filed as required.
In 2022 LienSafe prepared, sent and tracked for Shaw 6,524 Notices to Owners at a cost of $8.40 per notice. This cost is significantly below the average charge by others exclusive of postage.
As indicated by Ron Duff, Senior Financial Manager at Shaw, one of the biggest benefits of using LienSafe is: “They notify us as we need to send preliminary notices, within each state’s specified time frame. Our database feeds LienSafe so they have the data and know when the notices need to be sent. Then we decide which notices to send and which not to send, and they put the information together and get it to the correct parties.”
THE SENDING OF THE NOTICES TO OWNERS PRESERVES LIEN RIGHTS AND ALSO SENDS A MESSAGE THAT YOU INTEND TO COLLECT, BOTH OF WHICH SUPPORT YOUR TIMELY COLLECTION OF YOUR ACCOUNTS RECEIVABLE.
If you send the Notice to Owner as required by the applicable state statute, you will preserve your lien rights against the real estate where your labor and products have been used.
This protection alone is important and valuable.
Also, sending the Notice to Owner has the additional benefit of sending a message to your customer that you intend to collect. This message supports the collection of your accounts receivable and supports payment being made closer to the invoice terms (the “DSO”).
Ron Duff, Shaw’s Senior Financial Manager, recently commented: “Sending preliminary notices is how we protect our interests. If you don’t send that notice and can’t get paid, you lose your right to that protection. The preliminary lien notice is the biggest protection you have. In addition, it certainly helps with receivables. It lets everyone know your intent to collect. Owners don’t want liens on their properties, so they look to their contractors to take care of their payments in a timely manner.”
THE SIDE COPY
CUSTOMER DETAILS
INDUSTRY
CHALLENGES:
SOLUTION
RESULTS
