Benchmarking Survey Shows Collection Strategies Meeting and Exceeding Goals Despite Recession: Part 3 - Improving Collection Performance
Question: Please tell us what you are doing to improve your department's collection performance. What innovations have you made? Have you changed how your staff is organized? Have there been any outsourcing or technology initiatives in the past year? The survey participants were clearly a proactive group. If you are not taking a proactive approach to credit and collection management, you probably should start looking for a new career. Specific steps the participants shared include increased monitoring of customers, workloads, and staff performance, as well as the implementation of automation tools, outsourcing services, rganizational changes and quality improvement initiatives. Several also made the point that whatever you do, you still need to pay attention to the basics. Staying Proactive and Prioritized
"We react to customers BEFORE they appear delinquent. We know who the poor and difficult paying customers are. We target them before they are even due and remind them what they need to do to keep product flowing and stay current. Being proactive like that has seemed to help."
- Dan Sproat, Corporate Credit Manager, Wholesale Fuels, Inc. "Calling 2-3 weeks after the invoice is sent to see that they received it, to see if they have any problems or issues, etc. It really makes the customer aware that we are looking at everything right from the beginning, not just when the invoice is past due. This has worked out very well in collecting the dollars in a far quicker manner - our DSO stays right in the 45 day range which is great in this economy!"
- Bambi Fisher, Credit Manager, Lowry Holding Company "We are improving our collection performance by working with our customers. Keeping them happy gets us paid. We have given our collectors the ability to work with our customers in any way needed to help our dealers - by offering dating, ability to return product that is not selling in
exchange for product that is selling."
- Ben Duncan, Credit Supervisor, Outdoor Research "We are fortunate to have a small staff. We can change our strategies fast and frequently, as the business environment requires. We are calling faster and addressing problems faster."
- Joyce Werner, Credit Manager, BC USA, Inc. "I am alone in this Dept and have to stay on top of the aging at all times. I sort by 'due in 5 days', highest dollar and collect those first. Then sort 65 days and over and collect the smaller invoices last. With me being the only one here, the Aging takes constant attention."
- Catherine, Credit Manager, Ohio Medical "Increased follow up on: open invoice collections, disputed deduction resolution, discussions with all level of sales and associated inter department staff.'
- Paul Setteducati, Corporate Credit Manager, Dual Corp. "We have started the collection process earlier. I review portfolios with each collector."
- Ken Smith, Credit Manager, Schwartz & Benjamin Increased Monitoring
"We meet daily to review suspended orders. This allows my analysts to understand our goals, and keeps the philosophy consistent. It also helps me to understand the issues they are facing, and where I can work with internal or external areas to help them improve their collection efforts. We are also constantly working on new reports that will help our Analysts prioritize their efforts."
-Gordon Miller, General Credit Manager, ISP Technologies "We've started having weekly discussions about all accounts with all collectors, both balance due collections and customer deduction collections. The participants get a chance to talk about the problems they've faced and get ideas from their peers or the managers."
- Dale Gerschutz, Manager, Haldex Credit Services Corporation "We have initiated a program that monitors billing activities and collection activities. Automatic e-mail routing reminders go out on clients where certain thresholds have been met. Based on the severity, dictates the level of involvement in the chain of command. If balances reach 180 days and no payments in last 2 months, the accounts are automatically turned over to a collector for intervention."
- Daryl Lawson, Billing, Credit and Collections Manager, Squire Sanders & Dempsey LLP "Keep an eye on workloads to determine if any balancing needs to take place. Others jump in and help someone that is on vacation, sick or just getting behind."
- Kris Skupas, Corporate Credit Manager, Schreiber Foods, Inc. "Since I have taken over, I print an aging report daily. I use this report to reprint any skipped invoices or to contact the client for any deductions taken."
- Michelle Morehead, Payroll/Credit and Collections, The Hamilton-Ryker Group Automation Tools
"All of our collection correspondence is done via email. There is no disputing that the notice was sent and we receive "read" notices when customers open their emails. We do the same with our electronic billings. We receive fax confirmations that they have been successfully transmitted and we receive acknowledgment from the IP address of the person that opened the billing."
- William Herring, Credit Manager, Air Routing Card Services LP "We have fully integrated eCredit (Cortera) into our decision making process, dispute management and collection process. Customers can pay their bills via our customer portal or by simply giving us banking information over the phone in order to initiate an EFT transaction. Centralized collections of a segment of our customer base has also led to increased collection percentages. Along with electronic delivery of invoices and statements we feel that the downturn in our business has led us to a greater level of efficiency in credit that will greatly enhance our profitability once the cycle turns."
- Dan O'Neill, CCE, Corporate Director of Credit, Stock Building Supply "We introduced automated collection software two years ago. This has helped our collection function 1,000 percent and allowed our collectors to make more daily contacts with past due customers."
- Tracey Skipp, Credit Manager, Krug Inc. "We have brought in ACH and on-line bill pay to assist. The on-line bill pay has been the biggest help. I think the customer's are much more willing to pay on-line than have to call us to make payments."
- Christine Stanbrough, Credit Manager, Guntert Sales Division, Inc. "We are working towards paperless filing for all accounts where all credit documents are scanned and stored on online. Also working toward automated credit scoring."
- Rocky Thomas, CCE, VP Credit, CMH/Space Flooring Products, Inc. "We use, credit card, EFT, Check over the phone, as means to collect our AR. No excuse of the check being 'In the mail', therefore we have a great many customers who pay over the phone."
- Barbara Condit, CCE, Credit Manger, SPS Companies "Our results have been consistent and exceeding expectations since we automated our collections, deductions & risk management in 2000."
- Mark Larouche, Credit Manager, Bayer CropScience LP "They work with the GETPAID automated collections system."
- Douglas Swafford, Credit & Collections Manager, US Xpress, Inc. "Consolidating computer platforms...Credit did not make that decision but was a beneficiary of the decision."
- Kirby Matlick, Director of Credit, Parts Depot, Inc. "Looking into risk-based collection prioritization, but not there yet!"
- Tony Warfield, Director of Credit, D&H Distributing "We're looking to integrate a workflow system."
- Julie Osuna, AR Manager, Ossur Americas Inc. Organizational Changes
"We just created a 'risk committee' that meets bi-weekly to address problematic situations. The committee includes top management. Accounts reviewed are set for follow-up and action taken before the next meeting. Calls on delinquent items begin at one day beyond terms, credit files and limits reviewed more often. Shipping suspended on any account with delinquent dollars greater than 20 days beyond terms."
- Thom Beaupre, CCE, Corporate Credit Manager, Metal One America "We just learned that the credit department will be reduced come the end of July. The position of billing and cash application administrator, which is currently a past time position, is being eliminated with the responsibilities falling to the person also responsible for managing collections and debit/credit resolution. With that, a strategy for improving collection activities, will be looked at more closely as we move through the transition."
- Deb Andrews, Corporate Credit Manager, Imperial Nurseries, Inc. "Past due reports that previously were run once a week are now run more often. One person is now responsible for accounts more than 60 days delinquent."
- Jeanne Sumner, Credit Manager, Willert Home Products "Re-organized workload and reassigned accounts by staff experience and maturity."
-Robert Armenia, National Credit Manager, Border Express Outsourcing
"Outsourcing has included assignments to collection agencies, no change to collection procedures."
- Margret Goodson, Credit Manager, Affiliated Foods, Inc. "We have outsourced some extremely labor intensive activities such as cash discount follow up or coupon reconciliation."
- Harris Semegram, Director of Credit, Prestige Brands Holdings, Inc. A Combination of the Above
"We are beginning to use a preview dialer for one market segment. It increases our ability to make more calls. Currently conducting a ROI to determine use of automated messaging software. We are also organized by business unit to provide 'experts' in that area to increase ability to collect without excuses."
- Toni Dunlap, Manager Commercial A/R and Collections, Brinks Home Security "Recent department reorganization with more emphasis on collections, recent and more efficient accounting software upgrade."
- Brent Ingersoll, Credit Manager, Black Diamond "Restructured to define specific teams and duties, e.g. collections team, credit team, cash application team, etc. Recently outsourced invoicing and statements. New Terms and conditions with new credit application."
- Sean Dowd, Credit and Collections Manager, Regency Lighting Quality Initiatives
"We are constantly trying to enhance our department by automating processes and by adding credit and collection tools and services. We discuss collection challenges as a team and address them with other departments to identify if processes can be improved. We also hold KAIZEN events to help other department understand issues and help us resolve them without affecting other company processes."
- Patrick Spargur, Corporate Credit and Collections Manager, Bally Technologies Sticking to the Basics
"When I came here, we did not have a credit application, statement, or any letters. I had to create all of these."
- Andrew Keefer, Credit Manager, Orthovita, Inc. "Education in everything.... Communication, collections, negotiating, the good old give and take act."
- Judy Bennett, Vice President -- Credit, CCC Steel, Inc. Hope is Eternal
"I dream of a staff I can lead, improve, motivate, organize and then live the good life, but not this year, maybe next year."
- Robert Simmons, CCE, Credit Manager, Western Milling, LLC
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