Sep 7 2018
Credit Control

The outsourced credit control case study you’ll never forget

Every company large or small is ultimately in business to make money, whether through the supply of services or products and that is where they need to focus their attention. Credit control, therefore, is often viewed as a necessary evil by many sole traders, SMEs, and even within some larger organisations.

In the following article, we will be taking a look at how a real life outsourced credit control case worked out whilst leaving a business owner to get on with what they do best – the day to day operations appertaining to supplying their products or services.

A real time outsourced credit control case study

A market leading credit control and debt collection agency was involved in taking over every aspect of a major client’s credit control activities. At the time, the business owners were becoming increasingly frustrated about the amount of money they were owed and the knock-on negative impact this was having on both their cash-flow and borrowings at the bank.

The principles decided that enough was enough and that it was neither ethical nor economical for them to allow their debtors to use the business as a free overdraft facility.

Setting external debt recovery and credit control services in motion

Once the credit control had been officially outsourced, the experts were able to carefully scrutinise the company’s existing credit control procedures and systems and that was when a veritable can of worms was opened up.

It was soon made clear that the credit control systems already set in place by what was otherwise a highly successful company, where far from adequate in controlling how credit was extended by the business.

The real cost of getting credit control wrong

The credit control company soon discovered that from the opening of clients’ accounts and setting initial limits for chasing up the ever-increasing number of overdue amounts, their system was questionably inefficient.

Providing a workable credit control solution

By taking over the organisation’s credit control as a whole, the management company was able to easily operate it as a separate off-site entity. This was all done for an agreed monthly fee and covered every aspect of debt collection from the initial forwarding of invoices to dedicated collections of any overdue amounts.

Through an evolving process based on working on behalf of the client while remaining aware of the needs of their customers, several successful protocols were established.

This resulted in increased cash-flow and also reduced the company’s borrowings at the bank, while also providing clear evidence of the excellent ROI on the cost of the credit management services provided.

Allaying the client’s concerns

As experts in all aspects of credit control and debt collection, the management company was fully appreciative of the client’s concerns in finding a balance between maintaining efficient cash-flow and upsetting their regular customers.

Through clear communication and education which included the company’s salesforce, account managers, and customers, the processes where initiated in a relatively short space of time. This also occurred without any measurable negative impact on the size of the customer base or total sales figures.

A positive and long-term credit management solution

Not only have there been no negative effects on the size of the customer base but 3 years down the road the company has seen consistent and scalable growth. Both the client and the credit management team are in agreement that freeing off the company’s resources to focus on the needs of the business has been crucial to this success.

Thanks to the expertise of the credit management company, the foundations that were laid at the outset now provide smooth and on-going control of the client’s accounts. This has led them to further agree that outsourcing expert credit control is a win, win for everyone involved. If you’d like to find out more, please contact us today.

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