Consultancy Case Studies

Air & Water Hygiene Services

Market: Technical testing and analysis | Turnover: £3m | 80 live accounts

Issue

• Difficulties managing the credit control function with no clear direction.
• Client had no structure on collection strategy
• Disputed debt not resolved promptly

Solution

• Agreed collection strategy with directors to include a process to escalate accounts for non-payment keeping stakeholders advised on progress.
• Implement disputed debt process and assist setting KPI’s for dispute resolution owners
• Worked with client to produce reports that highlighted disputed debt and value that was collectable

Result

• Client can clearly see where the problematic accounts where and allow direct focus to resolve.
• Overall outstanding debt reduced from £100k to average £30k
• Disputed invoices outstanding days from 28 days to 7 days
• Improved ownership of disputes and reduced timescales for resolution
• Increase team work ethic and business focus whilst ensuring customer satisfaction

Waste Management Company
Market: small retail companies & independents in hospitality | 7212 Live Accounts

Issue

• Debt levels increasing towards £1m overdue 
• No processes in place for chasing failed or cancelled Direct Debits accounts or escalating accounts 
• 50% or more customers opening times were evenings or early mornings only 
• Client hadn’t contacted customers for payment for more than 3 months, therefore, no knowledge or disputed or undisputed debt 

Solution

• With agreement from client, temporary and current staff worked overtime in early mornings and evenings to target specific customers 
• Worked with client to implement on hold process for customers failing to sign up to Direct Debits or clear outstanding debt within agreed timeframe 
• Designed & implemented collection strategies 
• Automated process where possible keeping human intervention where necessary  
• Introduce statuses for each type of customer or service to allow team members to concentrate on specific groups 
• Create reports with client splitting disputed and undisputed debt and separate teams into two  
• Implemented disputed debt management process setting KPI’s with dispute resolution owners 

Result

• 80% of customers re-signed back up on Direct Debit to reduce time spent chasing debt 
• Disputed debt levels reduced by £100k in 2 months 
• Overdue debt levels reduced significantly due to accounts being placed on hold

Technical Testing and Analysis Company
Market: Construction & Retail| Turnover: £10.8m | 340 Live Accounts

Issue

• Debtors regularly paying beyond agreed terms
• No escalation process enabled their customers to delay payment without any implications
• 90 day + debt very high

Solution

• Develop, gain buy in from the business and implement a new customer onboarding process with the aim of identifying contract requirements to reduce disputes and identify unacceptable terms
• Training sales & project team on commercial aspects of customer terms and contract law.
• Worked with client to produce reports that highlighted disputed debt by reason code, value, volume and days taken to resolve to assist understanding process and system changes needed in the order to cash process, identify any training needs and set KPI’s.
• Weekly conference calls to discuss high profile accounts and any disputed debt that require input from multiple teams and how to coordinate this

Result

• Debtor days reduced from 100 to a constant average of 54
• Reduced disputed invoices and improved timescales for resolution, therefore improving customer satisfaction and cash flow
• Increased cashflow means ability to grow substantially by acquisition

Supplier of skilled labour to the oil and gas industry
Market: (Global) | Turnover: £150m | Invoice Finance

Issue

• Considerable outstanding debt tied up in disputed invoices
• Used invoice finance to fund their business, a condition of which was credit insurance

Solution

• Carried out a diagnostic report to cover the whole order to cash process
• Compiled an in-depth credit policy that complied fully with the credit insurance policy and rolled out to all areas of the business to gain ‘buy in’ with sales force and account managers
• Set up dispute resolution system along with meaningful management reporting
• Set KPIs
• Assisted with the recruitment of skilled and motivated credit control staff to ensure effective cash collection

Result

• Within three months our client was able to collect £2m that had been previously disputed
• Gained improved working capital due to robust credit policy
• Resulted in reduced costs with financiers

Recruitment consultancy
Market: (Accountancy, Sales & Admin) | Projected Turnover: £40k

Issue

• Client was a new start-up company and wanted to protect themselves from bad debt, and know how to collect outstanding invoices effectively

Solution

• Delivered advice on terms and conditions of sale, and provided template letters and advice on how to incorporate the terms
• Looked at credit risk assessments
• Advised them how to be proactive in collecting any outstanding payments whilst complying with current legislation and improve their client relationship

Result

• Client now has a bespoke framework to work within for credit control issues that is directly relevant to their business
• Peace of mind

Building Services Consultants
Turnover: £600k

Issue

• High debtor days

Solution

• Carried out a diagnostic review covering ‘Order to Cash’ process, identifying under-performing areas.
• Designed & implemented an in-depth credit policy.
• Coached existing staff to carry out credit control functions

Result

• Skilled and motivated credit control staff
• Reduction in debtor days from 92 to 45

IT Support Company
Franchised

Issue

• Credit policy and procedures required to roll out to all franchisees
• Policy to include general advice to franchise holders to help them implement the policy

Solution

• Designed & implemented an in-depth credit policy together with training notes
• Ran classroom style training course for franchise holders

Result

• Consistent and proactive approach to credit management across the brand

Marketing Company
Market: Local Government, Health Authorities, Corporate

Issue

• Client typically agreed to their customer’s terms and conditions
• Lack of understanding the commercial aspects of accepting their Client’s terms without negotiation
• Client lost money on several contracts as the scope of their quote was not specific enough

Solution

CMG UK provided advice on:

• What to be aware of in customer’s terms and conditions and what points to negotiate on
• Ensuring there are consequences for late payment in all contract terms or they can rely on Late Payment Legislation
• Ensuring the scope of work was very specific and how any works outside the original scope would be charged
• Being aware of their contract obligations to ensure they deliver as per the contract and cannot be held in breach of contract.

Result

• Client now has reduced exposure to risk
• T&Cs can now be used as a form of leverage to receive payment from late paying customers.

Provider of security systems and man-guarding
Turnover: £3.7m

Issue

• Client wanted to improve cash flow by invoice financing but their current credit management process was not compliant to underwriter’s requirements

Solution

• Refined all aspects of credit management
• Set up management reports and set collection targets based on debtor days
• Addressed the viability of invoice financing for the business and made them aware of the restrictions it would place on the business
•  Liaised with provider to find most suitable deal for client
• Recruitment of credit control staff

Result

• Collection performance has improved dramatically, significantly improving overall cash flow of business and therefore the business has not needed to use invoice finance
• Morale of staff has greatly improved through significantly increased confidence in the work they carry out

Provider of monitoring service to vulnerable and elderly
Turnover: £800k | Approximately 5500 live accounts

Issue 

• Client has large volume of customers and invoice types that made allocation of receipts very time consuming with a high error rate
• Outstanding debt was considerable due to the volume of customers

Solution

• Identified and implemented a software package that could be amended to suit the client’s needs that would deliver the following:
  • Automatic allocation of standing orders
  • Workflow steps to allow credit control calls and letters to be more efficiently managed
  • Coached staff in credit control techniques, general sales ledger management and reconciliations
  • Set up management reporting to chart improvements in collection performance and to aid strategic management decisions
  • Set up process to reconcile the operations system to the finance system for revenue protection

Result

• Significantly improved cash flow
• Reduction in accounts not billed in error
• Accounts staff trained and motivated
• Reduction in number of staff hours spent in accounts due to efficiencies

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