1. The document discusses strategies for maximizing receivables as delinquencies rise due to the pandemic. It recommends prioritizing accounts, assessing needed adjustments, and finalizing a plan to maximize cash flow. 2. Key recommendations include focusing collection efforts on accounts that are most likely to pay slowly but eventually pay based on their credit scores, and accelerating legal action or restricting credit for low-scoring accounts that pose the highest risk of non-payment. 3. Commercial recovery scores can help identify the segments of accounts that are most likely to result in collections, with the top 30% of scores accounting for 72% of potential dollar collections. This allows collection resources to be focused most effectively.

1. 1 © Experian
Sip and Solve
How to maximize receivables as
delinquencies rise
Featuring:
John Krickus
Senior Product Manager
Your
picture
Andrew Moore
Senior Analytical Consultant,
Commercial Data Sciences

2. 2 © Experian
Receivable management issues will grow… exponentially
The challenge…
• Significant increase in accounts going delinquent, by multiples, in weeks
• Resource constraints that do not approach the new level of past due accounts
Cash generation
is high priority
Key questions
1. What projected increase in delinquent accounts are you facing? 2x? 3x? More?
2. What is the cash flow the business is going to require, as cash is now most
important?
3. Do you have the resources, people, and tools, to meet significant spikes in
delinquent accounts?
4. Given the answers to the above what changes in policies and resources are
needed? (and fast)
$

3. 3 © Experian
Developing a receivable treatment plan
1. Prioritize - base strategy
2. Assess - identify needed adjustments
(two specific areas)
3. Act- finalize plan and execute
Maximize Cash Flow

4. 4 © Experian
Identify slow pay, BUT WILL PAY
Early stage receivables - Immediate cash vs. Maximize cash
Maximize cash over time?
Focus on slow pay, but will pay
accounts (in green) low risk for
business failure, but will pay
slow. Highest scored accounts
become second target.
Need immediate cash?
Focus on the best scoring
accounts (in yellow) for both
scores
Managing Early-Mid Stage Delinquency
Intelliscore Plus V2 (or SBFE/SBCS)
Low Score High Score
Financial Stability
Risk Score
High Score
Best group for focusing resources
to generate payments
Pay slow, but will pay
Best group for self-cure
Lowest risk of delinquency & failure
This category is second target
Low Score
Least resources
Significant risk for non-payment
Negotiate payment terms
Caution with credit lines
Small set of accounts
Good payment risk but significant default risk
Special circumstances, potential legal
filings, other?

5. 5 © Experian
Implementing a Score Based Collection Strategy
• Application across multiple business functions
• 1st / 3rd Collections and Receivables Management
• Key Themes
• Maximizing Recoverable Yield / Managing Dollars at Risk
• Applicable to all levels of an organization
• CFO to Collections Manager
Benefits:
• Reduce costs: Rank order
treatments in terms of collection costs
• Optimize collection efforts: Apply
appropriate treatment strategy prior to
returning record per the client
deadline or warehousing the
placement to revisit at a later date
• Accelerate legal action, credit line
freeze: For low scoring accounts
accelerate collection / legal actions

6. 6 © Experian
Late stage receivables- Commercial Recovery Score
Top 30% captures 72% of potential dollar collections
Chart of collection performance by numbers and dollars
26%
45%
58%
46%
62%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Top 10% Top 20% Top 30%
Commercial Recovery Score
Recovery # Recovery $$$

7. 7 © Experian
Experian Commercial Recovery Score – Analytical Insights
Mail / Email / Text reminders,
Auto-Dialer, Low cost contact
options; likely to pay
Phone calls, likely to pay
Phone calls, urgent past due
notices, more calls, likely
slow pay
Urgent phone calls, urgent
demand letters,
attorneys/legal action
Potential Treatment StrategyCreate segments using the
Commercial Recovery Score to
more accurately and efficiently
apply Treatment Strategies
Isolate lowest % of placement
dollars to take final action and
focus resources else where
Commercial Recovery Score
Score Range
% of Total
Placement
Count
% of Total
Placement $
Avg. Place
756-825
39.90% 58.40% $10,500
730-754
713-729
695-712
677-694
29.40% 24.10% $5,900.00665-676
653-664
635-652
20.80% 13.30% $4,600.00
616-634
469-614 10.00% 4.20% $3,000
Total 100.00% 100.00% $7,100.00
Balance the Probability of
Collection with the Placement
Amount to Maximize
Recoverable Yield; as scores
decrease you see fewer dollar’s
at risk

8. 8 © Experian
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
489
555
572
578
589
598
602
606
611
615
620
624
629
633
637
641
645
649
653
657
661
665
669
673
677
681
685
689
693
697
701
705
709
713
717
721
725
729
733
737
741
745
749
753
757
761
765
769
773
777
781
785
789
793
797
801
805
809
813
817
821
825
829
833
837
841
845
849
Commercial Recovery Score Distribution
Sum of COLLECTION_BALANCE Sum of Place. Cnt.
Low Probability of
Collection
High Probability of
Collection
Clean Score
distribution,
Largest % of
placement $
OPPORTUNITY,
material $’s at Risk –
FOCUS area
Minimal $’s at risk,
low probability of
collection,
FINAL ACTION
Placement Dollars Percent of Total Placements

9. 9 © Experian
Consolidated Skip Tracing Information is a value-add to the Commercial Recovery Score offering
• Experian is aggregating multiple data sources into one file output; creating efficiencies in gathering data
Skip Tracing Information Includes:
• Up to 5 Officer Contacts within the organization
• Up to 10 Additional Locations with full address and additional unique phone numbers
Production Test Results:
• The Commercial Recovery Score batch output provided 30% additional NEW contact information
• 60% of the additional contact information resulted in a “good net new contact”
• Delivered positive ROI
• Client then provided full portfolio for batch “scoring”
Commercial Recovery Score – Skip Tracing – Value Add

10. 10 © Experian
Key takeaways
• Use scores and analytics to focus your resources on accounts most likely to pay
• Commercial Recovery Score will assess the potential for payments on the most
severely delinquent accounts
• Additional phone numbers and addresses will help track down accounts
Have questions or want to learn more about maximizing receivables?
• Email us: CommercialDataScienceRequests@experian.com
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