Date post: | 25-Dec-2015 |
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A/R • Do any of you charge late fees/interest
charges? – How do you invoice/collect? Who has the ability to waive/forgive?
• Yes, by marketing, finance• Objective – to change customer behavior• Charge Finance charge• Sales or finance – waives/forgive• Calculated % they will collect, remainder in
bad debt reserve
A/R cont
• Days only calculated on days beyond terms• Have reports that tell when disputes are valid• A certain % charged per annum: calculated
after payment• Primary goal is to change/speed customer
payment habits• Some customers prefer late fees to timely
payments
Dispute Resolution• Do you have a team dedicated to dispute
resolution, or is it the responsibility of the A/R Analyst to resolve all disputes? Does anyone have website dispute processes?
• Most have A/R rep + Sales• Account Resolution Manager• None on website
EDI Discrepancies
• If a customer EDI tenders a rate, do you use that rate or default to contract rate? What then do you do about discrepancies?
• N/A to most in group asked• EDI tender vs contract• Customer only pays amount tendered• Resolution – Sales/rates
Cash App• Do any of you accept on-line payments?
What tools do you use?• Generally yes. May be thru bank or financial
institution• Depends on type of online portal used• Uses Skipjack where customer enters info
from a website link, accepts for prepaids only• Accepts credit cards• Don’t keep crdit card info onsite, utilizes ACH
debit & credit
Cash App (con’t)• Accepts a lot of credit card activity, initiates
payment,• Uses payment ach for cc info storage &
maintenance• Process disputes faster if customer uses their
website for payments, disputes, etc.• Will waive finance charges if customer uses
website• Chargebacks happen, not huge numbers, usually
on retail customers, most credit card info on commercial business
Remittance Advice• If a customer does not provide
remittance advice, what have you found to be the best solution?
• Send email or call the customer, don’t just apply funds to oldest
• Pushes application issue back to brokers• Still has cash app/deposits at 300+ terminals• Avoiding misapplication of funds is critical
Resolving Credits• What is your policy and process for
resolving credits on accounts (unidentified payments, over payments, duplicate payments)? Is customer notified? If no response, what do you do with the credit?
• Notify customer• If no response will try to contact customer, if
no claim then they declare it to the state• Will refund the money, no outstanding
credits unless customer is significantly past due, some judgment involved
Resolving Credits (con’t)
• Cut checks within 7 days of receipt of funds is SOP
• Others find frustration internally with how to best handle funds on account
Collections & Credit
• Hearing more about Brokerage divisions. Are the same Collectors used for the asset side as well as brokerage? How are the brokerages set up? As wholly owed sub, LLC, or completely independent? Is their DSO calculated separate or together with asset side?
• No broker experience in group
How Collectors Split• How their Collectors are split out.
Examples: sales region, dollar amount? Are the Collectors in a group with the Billing area? Do they use automated software to organize their collections?
• Regional w/switches every two years• No assignment – Assigned daily• Shifts staggered to cover all time zones• Software is used with data/time/person• Outsourced
How Collectors Split (con’t)
• Assigned to Sales/Collections Group• By product, or state & national accounts• By brackets/buckets (i.e. to 40 days, then >
40, etc.)• Size of account• No set delineation-size of portfolio per team• High profile/National• Geographic/Salesperson
Outside Collection Svcs• Success/shortcomings of using
outside collection services• Language barriers • Technology i.e. file sharing• Administrative work• Expensive• Theory: Changing agencies more frequently
keeps them on toes• To measure performance – use more than 1
O/S at 60 days or have exhausted all efforts• Recommend minimum of 2 agencies• Placement between 15 & 100/240 success
dependent on age of receivable
Outside Collections Svcs Success Factors(con’t)
• Implementation of agency/customer relationship
• Implementation available on accounts transferred, access to system/communication
Third Party Collections
• Collect inside until 30 days past due/outsource after 30 days
• Small amounts that stop communicating/success in “jump starting communications
• Recovery rate bad if you don’t push invoices to 3rd party in timely manner
Collecting Past Dues
• What are your 3 best practices you use to collect a past due account?
• Bill electronically via email• Auto bank drafts• Collection calls within 3 days of due date• Security to collect on• Replace bad debts with wire immediately• Place account on hold
Master Service Agreements
• What is your policy/success rate on obtaining signed Master Service Agreements and/or Rate Addendums?
• Mostly tries to get signed agreements• No business without agreement• Change rate hit or miss on getting new
addendums in
Exposure on Non Asset Brkrs
• How do you determine maximum exposure on non-asset brokers or brokers in general? Is a different credit model used to score and limit?
• Same collectors for brokerage• No brokerage experience in group with this
question
Credit Lines/Limits
• Do you count unbilled revenue against a customer's available line of credit? Do you include revenue in transit?
• Would like to but access to info is limited• Rail doesn’t have a limit per se• Yes
Reviewing Credit Limits
• How often do you review credit limits? What triggers review?
• Limits are not necessarily reviewed• Worthiness is reviewed annually• FISK and D&B triggers may sort• When customers change programs• When credit limits are reconsidered• Inactive customers are purged, so reactivation triggers review• Often customers will have multiple accounts – need to be
viewed in whole• (30-90%) of revenue result in an action• Credit hold is visible throughout company
Temporary Credit
• Temporary conditional processes for credit establishment. For how long do you allow them to go on temporary?
• Only in cases as a “bridge” for operational situations
• If carrier makes a mistake, temporary conditions may apply
• No business difference
Invoicing
• Customers who refuse to go paperless on invoices or require originals....what is your process? Do you have set processes in place or negotiate on a per customer basis?
• Educate customer throughout life cycle• Sending surveys, emails• Encourage electronic & other services• Sales does get involved• Customer wants co. to do the work & support
heavy back-end processes• Very few on paper
Sending out Statements
• Do you send out statements and if so how often and when?
• Available, but on demand, not typically sent regularly
Electronic Invoicing• Electronic invoicing to customers: Giving them options to
immediately review invoices, pick and choose the invoices that they want to pay and transfer that payment directly from their account to the carrier account in one step.....anyone doing that? How's it working? Are you a using "3rd party" billing provider or your own? What are the liability issues to be aware of?
• One co parcels out/ Inhouse vs 3rd party• Collaborative effort in company• OLB – register cc, but customer pays• File sizes• Can submit disputes and get copies• Freight payors
Electronic Invoicing(con’t)
• ___3rd party agents can access co’s systems to see open statements; 3rd party customer edit info or file a dispute
• Online standard regulation for paper• Issue of quality control – vendor usage – non-linked
systems disputes• Additional transactions has led to more effective
collections, less outsourcing required
On Line Web Invoicing
• On line Web based Invoicing with options to pick and pay automatically via directly through bank accounts. Is anyone doing this? Tips to share?
• Yes at ship CO. site-customer can see all open invoices, can dispute, can pay online. Issue –no remittance details; for example check comes from CO X, but pays for CO –Y, so we don’t know who/what it’s for; direct wire-process to receive and automated; internal wires generated
• 3rd party billing – account may dispute- the challenge is that payment processing service – leads to dunning letters & regular customer exposure due to delays, marketing materials sent out to be proactive, educate customer. Helped drive up awareness and compliance.
Payments• "You get paid, when we get paid".....
what do you do?• Not applicable • Go back to the contract terms which does not
include this as a conditionOther Solutions
• Partial weekly payments instead of monthly• Auto-payments set up if outside of terms• Tighten availability of product/service if not within
terms• Establish CLEAR terms upfront – credit terms are
not negotiable• Get logical
Over/Duplicate Payments• How do you manage overpayments and
duplicate payments on customers accounts?• Some return overpayments right away or
after certain period of time• Some retain if customer is past due• Customer asked if can be applied to oldest
invoice• Question asked if sent for escheatment• Escheated to the state where customer
incorporated or resides
Overpayments/Duplicates(con’t)
• If true overpayment and a customer in good standing does whatever customer requests, if past due, negotiate
• Question: do your credit apps/agreements allow for offset of credit balance to unpaid balances?
Credit Card Payments• Success/shortcomings of credit card
payments• Costs absorbed-not passed on to customer• Expensive! But used successfully to
increase sales, collections, decrease DSO , speed up payment
• Most are accepting• Fees are an issue• Credit cards are last resort payment process• From new customers
Drafting Payments• Success/shortcomings of drafting
payments• 50% using ACH mostly pushed from customer, few
actually pulled or proactively used ACH as a payment form
• Success of use of electronic payments has a lot to do with the mindset of the credit dept towards electronic payments
• Suggestion - Get wire payments-cannot return• Get Authorization