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| Situation Despite a poor payment history, the client is a profitable customer because they pay list price, but are seriously past due with $250,000 over 90 days old. The client company owner is a friend of the President, and their truck picks up goods on a weekly basis. Since the client AP clerks have been unresponsive to collection calls, the collection clerk calls the client’s Controller who says: “This is the first I’ve heard of it. Who’ve you talked to before?” The clerk has to rely on hand written notes, memory, and e-mails in the deleted folder, can’t recall all the names, and remembers only fragments of past conversations. The Controller asks for a list of the past due invoices for review. The collection clerk faxes a list of invoices to the client, which sits on the Controller’s desk. The collection clerk calls again for action on a steadily growing past due balance. The Controller reaches an agreement with the vendor’s credit manager that their truck driver each week will bring a check to cover CIA (cash in advance) for the goods being collected plus 50% over the CIA amount to be applied to past due balances. The client’s Controller forgets to let anyone know about the agreement or the check that’s needed for pickup. The collection clerk leaves a voice message on the arrangement with shipping, which is mistakenly deleted by a temporary employee. The situation worsens as the customer continues to pick up goods without leaving a check. The collection clerk finds out and complains to the CFO. The CFO places the client on immediate credit hold. The owner of the client company appeals to the President because his business is threatened by the material shortage. None of the alternatives are appealing: the President can lose a friend or continue with an increased risk because the customer is so far behind now that they are unlikely to catch up any time soon. Summary: Exposure for bad debt expense; high days outstanding; poor cash flow; potential loss of a significant customer. With Final Link When the client’s Controller asks about previous contact history, the collection clerk accesses Final Link ™ and reviews recent collection activities in the central repository from all prior calls including date, time, discussion points and promises, and the contact name. The clerk then creates an activity by entering the conversation topics with the client’s Controller in the activity workbench along with the terms of the delivery payment agreement at pickup. The activity (message) is sent to the President, CFO, shipping department, the distribution manager, and the client Controller’s PDA as well as being stored in the Final Link ™ central repository. The customer’s truck arrives without a check and the driver is turned away with an explanation. The customer is contacted and their Controller apologizes for not following through. The customer’s Controller agrees to wire the money immediately so that the truck can return, and commits to a check with all trucks in the future. Summary: Customer is retained; bad debt reduced; lower days outstanding; improved cash flow. |
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