You know the feeling - you’ve just knocked out an incredible restoration project. Your team went above and beyond, the homeowner is beyond happy, and your reputation is solid. But there’s one issue—the payment is AWOL.
Sound familiar? If you’re in the restoration business, you know what I’m talking about.
Mortgage companies have an annoying tendency to hijack your sense of success by determining when and how you get paid. And it’s never on your schedule. As we all know, these mortgage companies are not in a rush.
While it’s frustrating, the truth is you are not powerless.
Instead of being reactive, turn the nonnegotiables of doing business with mortgage companies into part of your business systems. By incorporating mortgage company idiosyncrasies into your systems, you can create an enterprise that’s cash flow abundant, stress-free, and unstoppable.
Master the payment process, just like you’ve mastered restoration. Here’s how to back control, streamline your operations, and get paid on time (every single time). Let’s get started.
Understand the Mortgage Companies
Let’s get this straight: mortgage companies are not your enemy. They’re there because they have to protect their own investment in the property.
While it’s true that their involvement creates extra layers of complexity and additional days on your timeline to get paid, they’re also the real moneybags and property owners behind the project. Without them, none of this can happen. Once you understand their necessity and limitations, you can shift the game, take control, and get paid.
Three facts of life when dealing with mortgage companies are dual ownership, check disbursement timelines and dual endorsement. Read on to understand what these mean and how to never let them stall a project again.
Dual Ownership aka Why This Project Will Take Longer Than Going At It Alone
When a homeowner files an insurance claim, the insurance company issues a check for the restoration work. But here’s the hitch: That check doesn’t go directly to you. It’s made out to both the homeowner and the mortgage company.
That’s because the mortgage company has a financial interest in making sure the property is properly restored before releasing the funds.
To make sure the property is restored at-spec, mortgage companies will often hire third-party inspectors to verify the quality and progress of your work. What this means is your work needs to pass inspection by third-party professionals to get paid.
If they don’t approve of what they see, the payment gets delayed. When you’re building your project timelines, account for the time it takes to do the project, schedule the project, and add a contingency should you fail your inspection the first go around.
What You Can Do About It:
How to Ace Your Inspection
While there’s no way to get rid of the mortgage companies or change their policies around insurance or inspections, you can fundamentally alter the nature and frustration level of your project by shifting how you interact with the inspection process.
Deliver everything they need – before they even ask.
What often slows down inspections is inspectors asking for unanticipated documentation or paperwork. Despite having finished the labor, you then need to go find or create the paper trail to gain access to what’s rightfully yours. Instead of wasting time once the work is done, be proactive in your paperwork and inspection prep. Here’s how:
Ask & Understand Ahead of Time.
To work successfully with third-party inspectors, reach out at the start of the process and understand the steps and requirements of their inspection. This’ll save you delays and accelerate your project.
AR Pro Tip: Take a moment to ask what are common delays for projects that are similar to yours in size and scope.
Document Like Your TImeline Depends On It.
To keep the money flowing, you need to provide detailed documentation—photos, invoices, receipts, lien waivers—to prove that the work is being done to spec.
As you work on the project, proactively collect, document, and gather everything you’ll need, so that on inspection day, you can sail through the inspection and accelerate your payment schedule.
AR Pro Tip:
Every day you’re working on the job site, take a photo. If you’re working - something has been changed. Document it.
What You Can Do About it:
Build a Reasonable Estimate
While there’s no magic wand that can speed up a project timeline or suddenly deliver cash to your account, you can shift the narrative of a project by how you frame it. Don’t try to impress your customer with a lower price tag or an overly accelerated time frame. Instead, be honest and realistic with them upfront. It’s more professional and will help maintain trust across the project.
Build a realistic timeline, not an optimistic one.
We all like to be able to deliver good news and seem like the fastest professionals in our area. That said, when you give your customer a best-case project plan and budget - every added delay becomes bad news and a ding to your ability to correctly estimate a job.
Build Delays into Your Project Timeline.
While it might feel counterintuitive, give your customer a worst-case scenario timeline. That way, as things (hopefully!) go better than the “worst case” your customer will continue to be surprised, impressed, and delighted across the job.
AR Pro Tip:
Look at previous jobs you’ve done at a similar size and scope. Average together their timelines and then add a 10% contingency delay. Let that be the timeline for the project.
Plan for an Unbalanced Budget.
It’s great when payments come in time. Except, we know that…they don’t. You’ve been in this game long enough to know that funds will be released in stages, so plan accordingly.
Build a financial cushion into your project budgets, secure a line of credit, or negotiate better payment terms with your suppliers. Make the frustrating conditions of the mortgage company simply part of the plan.
What You Can Do About It:
Strive for Excellence
We’ve talked about the ways you can meet others' expectations and plan for the factors outside of your project. That said, there’s always plenty you can control within your work as well.
Comply with strict standards by exceeding expectations.
Mortgage companies don’t just want repairs—they want partners they can trust, whose work meets strict building codes and industry standards. That’s why inspections are the make-or-break mechanism of our industry.
If your work doesn’t meet their standards, the mortgage companies ultimately carry the burden and your business suffers. But as we’ve said, you have control of this. Here’s how to exceed expectations with your mortgage company partners:
Make Quality Assurance a Non-Issue.
Striving for excellence is about more than getting paid—it’s about building a reputation as a top-tier contractor. When you consistently deliver quality, mortgage companies will trust you, and payments will flow more smoothly.
AR Pro Tip:
When you’re aiming to level up the quality of your work, figure out which past jobs really knocked it out of the park. Then share those standards and expectations with your craftsmen so they know what you want to deliver.
Don’t Get Beat on Building Code Compliance.
Know the local building codes inside and out. If your work doesn’t meet code, the inspector will flag it, and your payment will be delayed until the issue is fixed. Don’t let this happen—just do it right the first time, every time.
AR Pro Tip:
Don’t be afraid to reach out to your building inspectors to know what to keep an eye on. You can ask them what is the normal standard and what they would like to see to knock the inspection out of the park. Inspectors are people too! By reaching out and connecting with them, you may reap dividends beyond what you could ever imagine.
What You Can Do About It:
Make Communication Your Competitive Edge
Now that you know everything you should consider during each step of the way here’s the last secret weapon that should permeate every step of your process:
communication.
Make working with you as easy as it can be.
Think of each interaction as an opportunity to showcase your professionalism, streamline your operations, and build a reputation as a top-tier restoration contractor. Communicating is never an obligation; it’s always
an opportunity.
Communicate Regularly.
Keep mortgage companies in the loop from day one. Send them updates on project progress, address their concerns promptly, and make sure they know you’re on top of things.
AR Pro Tip:
Don’t be afraid to reach out every 3-5 days with a progress report or with any outstanding information. When they trust you, they’ll release payments faster.
Understand Their Processes
Every mortgage company has its own way of doing things. Learn how each one operates so you can anticipate their needs and streamline the payment process.
AR Pro Tip:
It never hurts to ask them what you should know about their processes or what mistakes other restoration companies have made. Learn from others’ errors to amplify your success.
Check Disbursement Timeline
aka Staged Fund Releases
Now that you know everything there is to know about how to streamline and accelerate your inspection processes, there’s still the funds release timeline.
Here’s a scenario I see time and time again: You’ve started the project, and things are going well, but just when you hit a major milestone, you realize you don’t have enough cash flow to keep things moving.
Why? Because the mortgage company is releasing the insurance money in stages.
To make matters more complicated, many mortgage companies require the check be sent to them first. They want to control the disbursement of the insurance money to make sure it’s being used for the restoration work—and nothing else. This extra layer of oversight can slow things down dramatically.
What You Can Do About It:
Know the Payment Timeline
Mortgage companies have an incredibly frustrating tendency to hold back a significant portion of your funding until specific milestones are hit. This obviously can create serious cash flow headaches. The best way to manage this is to understand the stages and to build a project timeline that allows for these disbursement delays. Here’s the intel on the standard steps and payment milestones:
Initial Disbursement: Mortgage companies typically release a small percentage of the total claim upfront. This amount can be 20-50% of the total project - but again, don’t be creating a timeline assuming you’re going to get all 50%. You’re setting yourself up for frustration.
AR Pro Tip:While no inspection is usually required for this first payment, do make sure to expedite signing your contract and submitting an approved estimate. These are the steps standing between you and getting paid.
Progress Payments:
As you hit key milestones—like completing structural work or passing inspections—more funds get released. But until those inspections are done, you’re waiting.
AR Pro Tip:
These progress payments often happen after specific work phases (ie: demolition or framing) or when a certain percentage of work (ie: 50%, 75%) has been completed. Along with passing an inspection to verify the completion of labor, you may need to provide documentation such as photos, detailed invoices, or progress reports.
Call ahead to understand the expectations and prepare your paperwork. Having all your documents ready on the day of your inspection will drastically expedite your payment process.
Final Payment: The final disbursement—the one that contains the bulk of the money—only comes after the project is 100% complete and passes all inspections.
AR Pro Tip:At this stage, a comprehensive inspection is required to assure that you and the project are in the clear. Make sure you call ahead to understand the scope of this inspection step, so you are fully prepared and can move through this final milestone without any hurdles or delays.
When you build your timeline, make sure to include or account for these delays and funding milestones. Don’t count on having the cash before you pass these milestones. Instead, build a budget and a process that is both strategic and realistic. Read on to find out how to stay in the black from start to finish.
What Else You Can Do About It:
Manage Your Cash Flow Strategically
You already know that mortgage companies are going to delay payments. So why not plan for it? Managing your cash flow effectively is the key to running a smooth operation, especially when payments are slow.
Budget for Delays: We’ve talked about this, but we’ll mention it again. Build contingencies into your project budgets to account for potential payment delays. This might mean securing a line of credit or setting aside cash reserves to keep things moving even when payments are late.
Invoice Factoring: If payment delays are a constant issue, consider invoice factoring. This allows you to sell your outstanding invoices to a third-party company for immediate cash, keeping your liquidity strong while you wait for the mortgage company to release funds.
Updated Budget & Real-Time Payment Tracking: There are plenty of tools out there that can help you track the real-time budget and cash flow of your project. Consider investing in an automated tool to be able to have real-time insights and analysis on your overall and project-specific finances. Worry less about cash flow and instead focus on what matters.
Dual Endorsement aka Why It’s Taking Forever To Finally Cash That Check
Lastly, restoration checks often require not one, but TWO signatures before they can be cashed or deposited—one from the homeowner and one from the mortgage company. Just when you’re ready to cash in and be done with a project, you’re stuck waiting.
As you already know, this can add days, weeks, or even months to the process. This isn’t anyone’s fault nor is it changeable; this time allowance you simply must add to your understanding of the project.
What You Can Do About It: Level-Up Your Documentation
Mortgage companies love paperwork, and every disbursement requires tons of it. If you miss a single detail, your payment gets delayed even further. But guess what? You don’t have to drown in the admin work. There’s a smarter way.
Standardized Templates: Create templates for invoices, receipts, and progress reports that meet the requirements of every mortgage company you work with. This streamlines the process, saves you time on the project, and makes it easier to gather and submit what’s needed.
What You Can Do About It: Add-In Automation
Yes, there’s currently plenty of hype about AI taking our jobs or drastically revolutionizing the workplace. That said, some of the changes is good and helpful. It can even free up your day and your time to focus on the higher level problems. The documentation process is one part of our industry that does not need to be done by a human.
Automate the Process: Invest in software that automates the documentation process. There are software solutions out there that can generate invoices, track project progress, and manage and submit all your documentation. The more you automate, the less time you spend on paperwork. The stronger your level of organization on the project, the faster you’re going to get paid.
The Benefits of Mortgage Company Involvement
While we started this article talking about outsmarting mortgage companies, we encourage you really to think about your interactions with them like collaboration.
Mortgage company involvement isn’t going away, even more —it’s shaping the future of the restoration industry. What often feel like roadblocks and barriers to payment are actually providing opportunities for improved business practices for those willing to adapt, learn, and grow.
By requiring compliance with building codes and industry standards, mortgage companies are pushing contractors to deliver higher-quality work—and that’s a good thing.
We’re seeing significant and encouraging changes across improved workmanship, risk mitigation, standardized business practices, and consistency across projects.
Improved Workmanship: The pressure to meet strict standards means that contractors are delivering better results. This benefits homeowners and raises the overall quality of work across the industry.
Risk Mitigation: Mortgage companies help ensure that restoration projects are completed to a high standard, reducing the risk of substandard work and incomplete projects.
Standardized Business Practices: As mortgage companies continue to influence the payment process, they’re also shaping industry practices. Standardized procedures, documentation requirements, and compliance checks are becoming the norm. Beyond that, they help you be more efficient, and organized, and get more done in less time.
Consistency Across Projects: The involvement of mortgage companies is driving consistency across the industry, leading to better outcomes and fewer disputes.
Capitalize on the Changing Landscape of Restoration with AR Workflow
While you can absolutely level up your business practices and successfully collaborate with mortgage companies with the same business tools you’ve been using for years, we’ve worked hard to build a tool that will help you accomplish much of the above with simplicity and ease.
AR Workflow for Restoration Businesses helps you automate your follow-ups, standardize your communication, and consolidate your documentation all in one place.
Here are some of the highlights of AR workflow:
Automation: Optimize routine tasks like invoicing reminders with our customizable automation to free you up to focus on growing your business.
Customized Analytics & Insights: Always have a real-time view of your collections performance with our industry-fueled analytics processor. Make data-driven decisions and refine your process.
Real-Time Payment Tracking: Get real-time updates and visibility over your payment due, invoices, and cash flow. Always know the state of your project or the best visibility and project strategy.
If you’re curious as to how you can simplify and streamline your projects with a tool built just for our industry, give AR Workflow a try today.
Click here to sign up for your free, 14-day trial
Take Back Control of Your Payments
and Your Restoration Business
Mortgage companies might be shaping the future of restoration payments, but that doesn’t mean you have to be at their mercy. By understanding their processes, building strong relationships, streamlining your operations, and managing your cash flow, you can take back control of your payments—and your business.
This is your business. Rise above the challenges, take control of the process, and create the space for exponential growth. The future is in your hands—are you ready to seize it?
