Collector - October 2016 - 38
BUSINESSOPERATIONS
Ross and his team kept their largest
accounts, but outsourced the smaller ones
to a collection agency hybrid program
through which agents work relatively
young debts with customer service
techniques but identify themselves as
agency employees.
Since beginning the relationship,
Blackboard has sent 3,000 late invoices
through the program and collected $27
million. "This program and first iteration
of placed items resulted in a nine-day
reduction in our overall DSO-huge
from a working capital perspective," Ross
said. "In addition, we received very little
pushback from customers, on less than 1
percent of total items placed."
Ross advised companies to control
their data. Blackboard's first invoice batch
included all that had reached a set number
of days past billing. "We did not vet the list
enough internally," Ross said.
On it was one of Blackboard's biggest
and best customers. The customer's
single late invoice was unpaid because
it was working through a dispute, in the
friendliest way possible. It was also about
to sign a multi-million dollar contract on a
new service package and was a bit unhappy
to get a call about the small disputed debt.
Fences mended, lesson learned.
SoTel Systems Accounts Receivable
Manager Delilah Morkisz was a onewoman department. "I had some softcollections that needed to be done, but I
couldn't handle all of it alone," she said.
The company hoped to hire more AR staff
in about six months, but she needed an
immediate solution.
SoTel considered several proposals before
outsourcing to the agency that was already
providing their third-party collection
services in July 2014. Morkisz placed about
250 accounts. "The biggest ones who I
talked to every day, I kept," she said.
"The ability to choose who we sent over
was important," she added, not only because
she wanted to work personally with the
largest clients, but because some would have
technical questions regarding SoTel services
that could more easily be answered in-house.
38
ENSURING THE QUALITY OF OUTSOURCED AR
A few tips to help the process go
smoothly:
* Hire an agency that knows your
industry and understands your
company and its customers.
* Establish in-house, pre-placement
protocol for accounts.
* Agree to the metrics that will
constitute success. Check to be
certain they are met.
* Define the type and frequency of
contacts with your customer, the
The agency recovered 86 percent of the
delinquent portfolios within 45 days.
"I didn't have the stress and I didn't have
to put in as many hours as I had been,"
said Morkisz, who recently accepted a
position with another company.
She advises: Ask for exactly what
you want. SoTel wanted the contractor
handling these calls to make two phone
calls and send one email reminder to each
customer within one month. "All of these
parameters should be flexible," she said.
A WARNING
Not every agency that says it offers these
services actually wants to collect accounts
while they're still young.
"There are programs out there literally
designed to generate contingency
collections," said Rudy Schatzmann,
national account manager for Altus
Global Trade Solutions in Kenner, La.
"They charge by the unit, often very
inexpensively, but most are letter services
only. There's not any contact by phone,
even to make sure the letters were
received. And there is a requirement that
at the end of the campaign, the accounts
go to contingency collection, which is
where these companies are really making
their money."
The outsourcing partner Blackboard
chose offered a guarantee: If an invoice
ages out without payment, the client
length of time each account will be
in the program and the terms and
conditions for moving accounts
from first-party to third-party
contingency.
* Verify that the company provides
adequate training and its employees
will comply with your needs as
well as government rules and
regulations.
* Get everything in writing.
can substitute another unpaid invoice at
no cost.
Businesses can also find assurance
by using an agency they already have a
relationship with-ask, as some offer
this service only to existing third-party
customers and do not advertise. They can
also hire separate agencies for first-party
and third-party collections.
Some agencies offering first-party
service may not be deceptive, but may not
be very effective either, said Steve Wolff,
principal at McCarthy, Burgess & Wolff.
The best way to avoid hiring the wrong
agency is to ask lots of questions.
"You want to know how they are going
to achieve the results represented," Wolff
said. "Ask what kind of contacts will be
made with the late customer and for proof
that the agency has adequate resources
dedicated to first-party collection, from
proper training to the right software."
Wolff 's bottom line: "Define the
metrics that will be used to measure
success, so that the agency can be held
accountable."
Bill Mann, IFCCE, is chief financial officer
for Joseph, Mann & Creed in Twinsburg,
Ohio. He is president-elect of the
International Association of Commercial
Collectors. For more information on the
commercial collection market, visit www.
commercialcollector.com.
ACAINTERNATIONAL.ORG
http://www.commercialcollector.com
http://www.commercialcollector.com
http://www.ACAINTERNATIONAL.ORG
Table of Contents for the Digital Edition of Collector - October 2016
President’s Page
Industry News
Best Practices
FYI
Collection Tips
Connect the Dots
Looking Deeper
Head of the Class
Calendar
Honor Roll
The Formula of Five
How to Create Winning Bids and Proposals
A Running Start
ACPAC Election Watch
ACA’s Industry Advancement Program Aids Eleventh Circuit Win for Member Company
Compliance
ACA SearchPoint
Last Word
Collector - October 2016 - Cover1
Collector - October 2016 - Cover2
Collector - October 2016 - 1
Collector - October 2016 - 2
Collector - October 2016 - President’s Page
Collector - October 2016 - Industry News
Collector - October 2016 - 5
Collector - October 2016 - 6
Collector - October 2016 - 7
Collector - October 2016 - Best Practices
Collector - October 2016 - 9
Collector - October 2016 - FYI
Collector - October 2016 - 11
Collector - October 2016 - Collection Tips
Collector - October 2016 - 13
Collector - October 2016 - Connect the Dots
Collector - October 2016 - 15
Collector - October 2016 - 16
Collector - October 2016 - 17
Collector - October 2016 - 18
Collector - October 2016 - 19
Collector - October 2016 - Looking Deeper
Collector - October 2016 - 21
Collector - October 2016 - 22
Collector - October 2016 - 23
Collector - October 2016 - Head of the Class
Collector - October 2016 - 25
Collector - October 2016 - 26
Collector - October 2016 - 27
Collector - October 2016 - Calendar
Collector - October 2016 - Honor Roll
Collector - October 2016 - The Formula of Five
Collector - October 2016 - 31
Collector - October 2016 - How to Create Winning Bids and Proposals
Collector - October 2016 - 33
Collector - October 2016 - 34
Collector - October 2016 - 35
Collector - October 2016 - A Running Start
Collector - October 2016 - 37
Collector - October 2016 - 38
Collector - October 2016 - 39
Collector - October 2016 - ACPAC Election Watch
Collector - October 2016 - 41
Collector - October 2016 - ACA’s Industry Advancement Program Aids Eleventh Circuit Win for Member Company
Collector - October 2016 - 43
Collector - October 2016 - Compliance
Collector - October 2016 - 45
Collector - October 2016 - ACA SearchPoint
Collector - October 2016 - 47
Collector - October 2016 - Last Word
Collector - October 2016 - Cover3
Collector - October 2016 - Cover4
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