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comment on collections and DIY valuation  / contracting with subcontractors
July 13,  2017
comment on collections and DIY valuation from June 23, 2017 article
    I couple of comments on the June 23 2017 article.
    I read Anon’s email regarding a collection issue with a system that was installed in 2013 and billed in 2014.  The Alarmco didn’t figure out that there was a billing issue until 2016.  I am wondering how the customer (school district or otherwise) was allowed to go this far past due with no action on the part of the Company.  Does the Alarmco management not review it’s aged accounts receivable on a regular basis and take action (including contacting someone higher up than the janitor)?  I realize that governmental entities are many times slow pays, but allowing a customer to get more than 120 days past due is not good. It also appears that they have continued to monitor a customer who does not seem willing to pay.  It seems that some follow up phone calls early on may have prevented expensive litigation.
    Regarding Tony’s question on the value of DIY accounts, you are correct, the concept is still new and there just aren’t a lot of sales to use as a guideline.  As these accounts do start transacting, the value of the accounts will be the present value of future cash flows.  That is how we should be looking at RMR valuations.  Any financial analyst can discount a stream of cash flows, the art is in determining what they are going to be.  Factors to consider will be attrition rates, the ease of which the account base can be transitions, and the proprietary nature of the equipment and monitoring relationships. 
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX
contracting with subcontractors
    I am looking to possibly hire a few independent contractors to help install some projects. I feel like I should have a sub contractor agreement ready for them to sign. The type of work they will be performing would be installing electronic security systems in a commercial environment. I already know that I would require that they provide a General Liability certificate (with my company as additionally insured) and workers comp forms. I'm sure that would all be written in that agreement.
    Please respond and or call me with details on how you can help me. Thank you very much and I enjoy reading your daily articles!
Note: This message can be used in your articles but please take out my name and company info. 
Thank you
name withheld
    Our subcontractor agreement is just what you need.  It comes in two forms, one when you are the contractor hiring a subcontractor [which is what you describe above] and the second form is for when you are the subcontractor.  We give you both forms when you order the Subcontractor Agreement.  And yes, it covers the insurance and lots more.  It's a rather short simple agreement; better than a handshake and easier to read and use, and much shorter, than the AIA form.


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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
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516 747 6700
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