Paint Company AR Management
Case Study

WHO

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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

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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

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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:

1. 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).
2. Or the customer could ask to speak to a Paint Corp representative during the call.

WHY

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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.