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A private equity-backed elevator and escalator provider sought our help to improve working capital by focusing on aged receivables and remediating the root causes of non-payment. The client needed an external perspective to bring new solutions and hands-on resources to recover the aged receivables.
We deployed a project team to remediate root causes for past due aging. Our initial collections focused on uncategorized aging accounts and instances of customer and system payment misalignment. These accounts represented approximately $16 million in past-due receivables.
Using requests for immediate credit card payments and other tactics, we collected a portfolio of severely past due accounts totaling about $16 million, which had been targeted for write-off. We also secured a $20,000 credit card payment on a severely delinquent account within the first two weeks of project support. Additionally, we identified the primary root cause of collection problems: while customers could demonstrate that they cancelled services, automatic invoicing continued because the cancellation wasn’t recorded in the client system. Our team proposed a deep dive into the cancellation process and increased transparency to improve the success rate of collections and reduce uncollectable accounts.