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Increase collections of old accounts by 25%  


The case study highlights a successful collaboration between our team of experts and the client’s management team to improve the collection of overdue customer invoices for their business.  The client was struggling with a high number of outstanding invoices, which was affecting their ability to meet financial obligations and potentially threatening their business survival. 


What we did: 

Customer Review  

We reviewed customer contracts, how often invoices were issued to customers, what triggered an invoice submission, how often payment reminders were sent and what the client was doing to monitor accounts receivable. 

Process Review  

We reviewed the financial management processes, including customer contracts, invoicing procedures and tracking of accounts receivable.   

Financial Data Review  

We reviewed the time between the time the work was completed to the time it took to get payment from the customer.  The impact of the outstanding invoices on the overall health of the business and their current ratio at various points in time. 


Summary of problem 

We discovered that invoices were being issued to customers roughly 30 days after delivery of the product and customers were paying on average 60 – 90 days after the invoice was received by them (mailed out).  Some customers were taking longer.   


The length of the time the work was completed and the time the customer paid was not factored into the customer analysis by the client.  The lag between the time the product was delivered, or work completed and the time the client received payment from the customer could be between 60 – 180 days (about 6 months), creating a collectability issue for the client.   


We also noted that the team would rarely follow up with a customer or review the aging receivables report and once a customer invoice is open for 60 days or longer, it becomes less likely to be collected. 




Our recommended solution was  

  1. Issue invoices electronically 

  2. Create a scheduled reminder to be sent to a customer if their invoice remained open for more than 30 days (their accounting system had this feature) 

  3. Include a small discount for paying early and an interest charge for customers who paid late 

  4. Discourage late payment with reduction of product delivery / work until the customer pays their bill 

  5. Document communications with the customers 

  6. Follow up with customers who had a history of late payment five days before their invoices were due as a reminder to pay 

  7. Issuing customer statements with interest charges every 30 days 

  8. Review of open customer balances, was enhanced to be completed weekly, with notes regarding communications, open orders, etc and shared with the entire team involved with the customer  

  9. Send invoices 90 days and over to a 3rd party collections agency for collections 




We worked with the client on the changes to managing their customer open accounts and instilling their new workflow process into their daily routines.  After six months of implementing these changes, the client saw a significant improvement in their financial health. The current ratio improved, indicating more timely customer payments, and there was a 25% increase in the collection of old accounts, including those handled by the collections partner.  

This case study demonstrates the importance of effective financial management and process optimization in improving cash flow and ensuring the financial stability of a business. It also emphasizes the benefits of strategic interventions tailored to address specific financial challenges. The client's success story underscores the potential for significant improvements in financial performance through the implementation of targeted process changes. 

Book a call with us today to explore how we can help you achieve positive results! 

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