Manufacturing company

decreases bad debt and DSO

 

 

manufacturer

2,000+ customers

1 receivables solution

About the Client*

  • $35 million manufacturing business operating in U.S.-Canada.
  • 2,000+ customers
  • 500+ employees

Operating in a highly competitive manufacturing sector, within the United States and Canada.

*Due to the sensitive nature of the data, the company name has been omitted from this study.

The Challenge

The business had immense chaos in their receivables, including a high dispute level and internal
turnover. Employee turnover negatively affected territorial billing and customer success,
leading to disputed items with customers. Due to lack of communication and systematic billing errors, customers were withholding payment.  Bad debt contributed to 650,000 – 1 million of the portfolio over 120 days.

The Solution

  • Client hires TCD to manage the A/R portfolio and solve receivables issues.
  • Immediate integration of TCD’s proprietary SMART system to manage receivables and queue follow-ups.

Click here to learn about the tools and benefits of SMART technology .

Initial Actions

  • Instituted credit checks to instantly qualify/disqualify credit customers.
  • Formed internal process to flow disputes for efficient resolution.

Managing Days Past Due

  • Eliminate cash on delivery (COD) payments.
  • Initiate Cash flow forecasting.
  • Transition new/independent customers to auto pay via ACH or credit card prior to
    service.

The Results

Ongoing management of the trade receivables, resulting in:

Reduction of Past Dues

  • Reduced past due balance 54 percent in four months from start of client contract.
  • Decreased DSO 26 percent, despite business and sales expansion.

Increased Cash Flow

  • Increased sales 40 percent in four years, while collection outsourcing costs increased by less than half the increase.

Cost Reduction

  • Decreased bad debt thirty-three percent.
  • Exceeded goal to decrease DSO from 67 to 40 within 10 months of contract date.

Improve your receivables

1.800.451.0164 (US-Canada)
1.651.451.0164 (International)
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INDUSTRIES SERVED
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COMPANIES WORLDWIDE

MEASURABLE RESULTS

  • Cash flow improvements of up to 50%.
  • Shrink day sales outstanding by 25% or more.
  • Increase unauthorized deduction recoveries by 200%.
  • Improve receivable performance management.
  • Improved financing opportunities and lender relations.
  • Live Data that improved strategic decisions.
  • Streamline aged receivable collection.
TCD Global Receivables Management

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Unlock your receivables cash flow. TCD has the key.

The Credit Department is the first and only true credit management outsourcing firm in the U.S., managing trade receivables for companies worldwide. We have worked in more than 100 industries to bring about change and dramatic results in our customers’ order to cash cycles.

As your strategic business partner, we become a cohesive and transparent component of your daily operations — whether you have an internal credit department or not. We also work with private equity groups to increase the value of portfolio company receivables to maximize cash flow from the asset. Our solutions integrate easily and cost-effectively with corporate systems within 24-48 hours.

If you’re ready to take control of your trade receivables management — and gain access to real-time cash flow forecasting — it’s time to contact The Credit Department.