May 1, 2026
What is accounts receivable management in restoration? AR management in restoration is the systematic process of tracking, following up on, and collecting outstanding invoices from insurance carriers, TPAs, and direct-pay customers. Effective AR management reduces average days-to-payment, improves cash flow, and reduces the working capital required to fund operations.
Restoration companies earn their money on the job site. They collect it in the office. In a business where 30-40% of annual revenue may be sitting in outstanding invoices at any given moment, the efficiency of that collection process has a direct and significant impact on cash flow and line of credit utilization.
Review your AR aging report weekly — not monthly. Invoices outstanding 90+ days are significantly harder to collect than invoices at 45 days. Segment by payer type: TPA program, homeowner insurance, direct commercial, and residential self-pay. Each category has different payment dynamics and different escalation paths.
Invoice within 24 hours of job completion — the collection clock starts when the invoice is submitted, not when the job is complete. Complete invoices only — an incomplete invoice will be rejected and add 2-4 weeks to your collection cycle. Confirm receipt for TPA and carrier submissions before moving on.
TPA: confirm receipt Days 1-14, initiate contact at Day 15 if not approved, escalate to account manager at Day 30, prepare for dispute at 45+. Homeowner insurance: educate the homeowner at job completion on the check endorsement process; follow up at Day 14 and Day 30. Direct commercial: Net 30 terms, courtesy reminder at Day 31, direct collection call at Day 45, escalate at Day 60+.
Industry average runs 65-80 days from job completion to payment, with TPA program work on the longer end. Well-managed restoration AR operations target 45-60 days average across all payer types.
Disputed TPA invoices go through a formal dispute resolution process specified in your program agreement. Document every communication, retain all supporting documentation, and engage your TPA account manager as first escalation. The RIA has resources for contractors dealing with systematic TPA payment disputes.
Mike McCabe is The Profit Detective — a 36-year restoration industry veteran and Fractional Operations Manager at Floodlight Consulting Group.
Most engagements pay for themselves within the first week.