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IQPC London June 2009
- 1. Creating Relationships that Pay Moving Your Bill to the Top of the Stack Presented by: Jerry Ashton CFO advisors, inc. June 20, 2009 IQPC London June 2009
- 16. Receivable Realities How Money Due Depreciates an average of 10% in collectability lost per month! (U.S. Dep’t of Commerce) Aging cycle over a year period $ Dollars
- 17. Accounts Receivable Portfolio Average Number of Active Accounts 5,500 4,000 – CFO Advisors 1,500 - Client Average Accounts Receivable $450,000,000 $XX,000,000 – CFO Advisors $XXX,000,000 - Client 4000 Accounts Outsource Company 72.7% 27.3% 1500 Accounts client Client 87.8% 12.2% Outsource
- 18. Results Year “X” Outsourcing Year-End Goal = 25% Reduction in Past Due Percentage From 39.8% to 29.8% Actual = 24.4% Reduction in Past Due Percentage From 39.8% to 30.1% Outsource Accounts Percent of $$ Past Due
- 29. Thank You Jerry Ashton President (212) 982-2152 CFO advisors , inc www.cfoadvisors.com
Editor's Notes
- Welcome Background on Jerry and Dexter Get around the room intro’s
- is needed to establish a baseline How many of you are doing it now System generated or Manual Same reporting measurements for years? Your industry is good, but other industries are ok to. It can depend on whether your selling Main Frames or servicing Credit cards So your in the bottom Quartile – remember it’s a frame of reference – it does not make you look bad, it shows you where you can improve Small benefit but a quick hit – gets the team motivated The project might be too difficult for your group, technology, budget to do
- You're obviously thinking about it since you’re attending this conference You might be told to do it soon - Your boss might be telling you to do it when you return from New Orleans You can do it all or in pieces
- The next few slides will be centered around the concept of Outsourcing It’s new to some, we think we pioneered… and invented….. Jerry to do
- What’s Broken, What needs to be fixed Where do you stand in and outside your industry Hackett and others What are you doing know, What can you implement in the short run, What can’t you implement even if you had a majic wand Why not outsource these functions – don’t want to let go, fear of mistakes - You probably outsource some now – bank lock box You cant make any chages until you measure ansd establish a baseline You can use the metrics to show accomplishments and identify the next area of improvement Monitor your outsource provider Don’t keep measuring the same thing – move on
- Partnering means giving up on trying to go it alone. Who would want to – your company couldn’t possibly have all the talent and resources you need to do your job. OUTSOURCE. And, be willing to share your company’s knowledge and talent with your partners. Win-Win!
- Any argument here? If an outsource firm is going to hit high marks, it has to be in respect of the tough job that has already been put in by your client’s staff. You are here to give, not to take. The forklift driver gets better training.
- How many outsource one function Now? How many multiple functions? How many planning How many fearful? Fearful of What? What has changed over the last 10 years……… Does this function contribute to the overall company mission Do we have or can we hire the right people Are our costs too high (in comparison to other companies Do we want to invest in new Software and technology Do collection agencies give us the right level of customer service and return?
- How many outsource one function Now? How many multiple functions? How many planning How many fearful? Fearful of What? What has changed over the last 10 years……… Does this function contribute to the overall company mission Do we have or can we hire the right people Are our costs too high (in comparison to other companies Do we want to invest in new Software and technology Do collection agencies give us the right level of customer service and return?
- One form of education – the reality of accounts receivable and losses that occur inexorably, month after month. Any client holding onto an account after 90 days had better have some very good reasons. Other than, “I’ll do it myself,” that is.
- A sample CFO account, showing our work for them in the year 2000. They outsourced 70% of their accounts to our staff. As these were “small balance” accounts (you are kidding me, of course), this freed their staff up to work the larger and more complicated cases. We didn’t really replace personnel, as much as free them up.
- The bottom line is always the bottom line – did or did we not help our client. Considering that our goal was to reduce their outstanding A/R under our control from 39.8 days by 25% -- or a reduction to 29.8%. The graph speaks for itself. From January and a high of 39.8 days, to December with a DSO of 30.1 days, it was obvious CFO was capable of hitting client-set goals. I regret to say…we did miss the goal by .02% Gratefully, the client allowed for this aberration.
- The CFO Advisors guideline for its collection intervention/customer service specialists is to “get the money, and keep the customer.” Seldom is a past due account there because of a customer’s desire to steal from our client. More often than not, there is some area of dissatisfaction that needs to be discovered and resolved. Amazingly, when a relationship is back on track – so are the payments! Sales Reps? The source of the problem so much of the time – and logically the source of solutions as well. Education, remember?
- Any argument here? If an outsource firm is going to hit high marks, it has to be in respect of the tough job that has already been put in by your client’s staff. You are here to give, not to take. The forklift driver gets better training.
- My appreciation to the Thomson Financial people for inviting me to attend and present at this audience, and to you attendees for taking time to see what is “outside the box.”