A/R Management Case Study
Automated Contact Management – Creditor Recoveries Increased by 56%
This paint company case study is based on the experiences of a major paint manufacturing client. Although we are contractually obligated to keep our client’s name secure, for the purposes of this case study, we shall refer to them as Paint Corp.
Key Takeaway
By automating their accounts receivable management on low balance high volume invoices
this paint company experienced a 56% increase in debt recovery!
WHO
Fortune 500 Paint Company
Paint Corp is a fortune 500 paint manufacturing company that retails in over 4000 stores globally. This paint company has won several prominent awards for:
- Quality rating
- Brand familiarity
- And top 100 places to work in IT
We had been providing third-party debt recovery to Paint Corp for many years and as a trusted vendor, they reached out to us for ideas on how to get control of this growing problem.
We chose this paint company case study to highlight accounts receivable management solutions and because of their unique situation.
WHAT
Collections on Low Balance High Volume Invoices
Upon examination we discovered that Paint Corp’s small balance customers eventually paid, but not until 120-150 days past due. Paint Corp could not make the time to contact each small customer individually. Instead, the credit teams needed to keep an eye on their large commercial and industrial client base, which represented nearly 80% of their revenue.
- Receivables were handled at a store level across 5 regional offices in Canada
- Balances were approximately $2500 or less at quantities of 1000 invoices per branch (5000 invoices in total)
- Aside from automated statements, no attempts were made to recover these small invoices due to staff restrictions
- Credit teams were maxing out on their workloads and morale was low
- Budget constraints prevented Paint Corp from hiring additional staff to manage these small accounts;
(At the time, Paint corp was exploring a further reduction in staff)
HOW
Solutions Implemented
For this accounts receivable management case study, we recommended a customized automated calling campaign, specific to each of the five regional offices. The messaging service provided two options:
- It would either leave a message for the small balance customer to come into the branch of Paint Corp and bring their account up to date (either to pay by credit card or find answers to their questions about the billing).
- Or the customer could ask to speak to a Paint Corp representative during the call.
WHY
Successful Outcomes
Accounts receivable enjoyed immediate responses:
- 56% increase in debt recoveries.
- 93% contact rate with outstanding small balance customers.
- They were able to stabilize a high number of outstanding invoices; Paint Corp credit teams were very pleased as every inbound call generated by our calling campaign wanted to pay by credit card.
- Staff morale at Paint Corp regional offices increased as the ever present pressure to do more with less had been affordably eliminated.
- Automated messaging campaigns became a standard operating procedure at Paint Corp going forward.
Paint Corp’s credit executives said that there was simply no way that their staff could have made such a quick impact by calling all the outstanding small businesses themselves. Nor could Paint Corp afford the manpower to produce the same results, without crippling the service levels on their large commercial and industrial customers.
We Are Here to Help!
Are you ready to try accounts receivable automation to get results similar to this paint company case study?
Since 2005, Priority Credit Management Corp has been helping Canadian businesses to protect their cash flow and improve their accounts receivable management processes.
If you still have questions or would like to learn more about this accounts receivable management case study, please call us our collection advisors at 1-866-895-1622 or contact us online to schedule a demo today.