Chain of Department Stores

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Chain of Department Stores 2017-05-22T02:14:59+00:00

Results

  • $450,000 of accounts paid out their balances within the first 10 weeks.
  • Receipts for overdue accounts increased from 34% to 64% as a percentage of the total receipts within only 3 weeks.
  • Overdue accounts represented only 20% of the total ledger after only 3 months resulting in a positive cash flow improvement of over $1.2M.
  • Personnel requirements reduced allowing human resources to be reallocated into more interesting and productive areas.
  • Administration and Accounting errors were recorded including change of address, unrecorded payments etc.
  • Systems and procedures were installed to enable proper management to continue at the conclusion of the assignment.

 

Original Situation

  • Suffering cash flow problems due to a downturn in sales, harsh economic conditions and a high percentage of debtor overdues.
  • Holding over 24,000 optional payment accounts totalling over $4M.
  • Over $2M 60 days or more.
  • Minimum payments only being made on majority of accounts, if any payments at all.
  • Existing methods of controlling delinquent accounts ineffective and unsuccessful.
  • Limited purchases being made due to the slow clearing of accounts.