Our client had never previously used a debt collection company to support them; in fact, they fought hard against it due to the belief that by utilising such services meant that they had failed.
Having reviewed the resources and systems utilised by our client it was clear that additional support was needed as DSO was static and bad debt provision wasn’t reducing in line with targets set by the board.
It was clear that the resources employed by our client were essentially spreading their time thinly across the whole expanse of the ledger and any threat of further action wasn’t initiated. As such, the company’s credit reputation was weak and diminishing returns had set in within the department.
In order to support our client with this common problem, we created a debt recovery service which dovetailed directly with our client’s collection strategy and which came in to play at 30-40 days overdue. Our client continued to manage all collection activity up to this point and any account that reached 30-40 days overdue in the future, that was neither a key account or in dispute was referred to Credit Styles specialist collection team to bring to a full and final conclusion.
This singular change of approach freed up significantly more time for our client's team to focus all their attention on front end control which meant they were more productive and as such actually reduced the volume of debt crossing the 30-40 day overdue line each month.
With both our client’s team and Credit Styles team firing on all cylinders DSO was reduced by 10 days over a 6 month period increasing working capital by over £3 million and bad debt provision was reduced by 66% over the same period.
The solution detailed above demonstrates that adopting a tailored innovative approach, challenging our own experiences and utilising the services of specialists will deliver the desired results which can then be maintained for many years to come!