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.
