HOW RGS BUILT A B4B SYSTEM TO PREDICT AND MANAGE PAYMENT RISK EARLY.
In the construction sector, late payments are often treated like the weather, inconvenient, unpredictable, but ultimately tolerated. Invoices drift past 90 days, finance teams chase signatures, and industry veterans shrug with a familiar phrase, “That’s just how it works.”
For Ash T. Arshad, General Manager at RGS, that status quo was no longer acceptable. “We realized we weren’t just delivering projects,” he explains. “We were bankrolling them. It may be common practice, but it’s not sustainable.”
Instead of accepting late payments as an unavoidable cost, RGS built a deliberate, data-driven model rooted in its Business-for-Business (B4B) philosophy, turning payment behavior into a measurable system the company can see, evaluate, and act upon before issues escalate.
The Hidden Risks Inside Every Contract
Every project begins with scope, schedules, and deliverables. But Ash and his team recognized that the real financial exposure often lived in the fine print:
- 90+ day payment terms that quietly shifted working-capital pressure to RGS
- “Pay when paid” clauses tying RGS’s income to the client’s own collection cycle
- Ambiguous contract language that left room for disputes on extras and variations
“We start projects in good faith,” Ash says. “But when terms aren’t honored, the risk doesn’t stay balanced, it lands on us.”
For years, RGS managed these challenges reactively: tightening cash, limiting manpower, accepting discounts, and pushing through. Necessary measures but not a strategy.
That changed under B4B.
1. Identifying Risk Before It Creates Pressure
RGS began by naming and mapping the risks rather than enduring them:
- Late payments and potential bad debt
- Invoice disputes
- High dependency on a small number of major clients
- Manual, error-prone billing systems
Then the company dug deeper, studying the root causes common across the B2B landscape:
- Weak onboarding and incomplete credit vetting
- Mismatched invoicing cycles and value delivered
- Complex billing structures and inconsistent documentation
- Poor communication around payment expectations
- Clients experiencing genuine cash-flow challenges
Payment behavior shifted from being a financial afterthought to a strategic indicator, highlighting whether a client relationship was healthy enough to scale.
2. Building a B4B-Driven Risk-Mitigation Framework
With risks clearly defined, RGS transformed its B4B philosophy into a structured system.
1. Stronger Onboarding and Credit Assessment
RGS revised its client evaluation model to prioritize predictable payers, not just large contracts. Updated assessments influence pricing, structuring, and project design.
2. Value-Aligned Contracts and Clear Payment Terms
Contracts now include standardized language, transparent deliverables, and defined payment milestones—typically Net 15 or Net 30. Late-payment penalties are positioned as expectation-setting tools, not punishment.
3. Optimized Billing and Frictionless Invoicing
- Automated invoicing integrated into CRM/ERP
- Same-day invoice delivery in the client’s preferred format
- Detailed line items with full supporting documents
“If you make it difficult to understand an invoice, you can’t be surprised when it’s delayed,” Ash notes.
3. Turning Payment Discipline Into a Shared Habit
Processes only work when people follow them. RGS embedded behavioral levers to encourage consistent payment patterns:
- Incentives: early-payment discounts, loyalty credits, and “preferred client” status
- Automation: embedded payment links and structured reminders
- Proactive Relationship Management: periodic value-review meetings to showcase performance, ROI, and align expectations
“Payment discussions shouldn’t feel like collections,” Ash says. “They should be value conversations. When clients see the impact clearly, timely payment is the natural outcome.”
Late payments don’t vanish overnight but they become predictable, measurable data instead of unpredictable headaches.
4. Measuring What Others Overlook
While most companies track revenue and margins, RGS added a crucial second lens: payment health.
Key indicators now include:
- Days Sales Outstanding (DSO)
- Average Days Delinquent (ADD)
- Current versus overdue accounts
- Dispute rates and collection cost ratios
- Credit losses as a percentage of revenue
Dashboards turn uncomfortable truths into strategic clarity:
- Which customers are sustainable long-term partners?
- Where should terms be strengthened?
- Which internal processes cause avoidable delays?
A stable supplier is as essential to project success as a reliable schedule. In that sense, this model protects clients just as much as it protects RGS.
From Surviving to Designing the Revenue Cycle
Zooming out, the benefits of the B4B-driven risk-management system are significant:
- Faster cash-collection cycles
- Reduced exposure to bad debt
- Improved working-capital stability
- Stronger project continuity
- Less conflict, more clarity
“We can’t control every client decision,” Ash says. “But we can control the system we use to work with them. B4B lets us do that respectfully and transparently.”
Many companies redesign their payment processes only during a crisis. RGS chose to do it from a position of strength.
The question for every contractor or supplier is simple! If late payments are already shaping your business, do you want them to remain invisible or become the risk you manage best?
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