Credit-Control

Case study – credit control

Background

My client had concerns over its bad debt and customer churn rate and feared the two were having a significant impact upon the business’ performance. The client was afraid that their credit control activity was actually increasing the problem by not being targeted correctly and causing the loss of valuable customers.

Appointment

Brookstand was asked to investigate both the bad debt level and the customer churn rate. The remit was initially to review issues within the debt cycle and identify any problems within the customer lifecycle which would cause a high churn rate.

Investigation

We mapped the customer lifecycle with particular focus on the debt cycle and produced a reporting mechanism to obtain volumes and activity. We conducted a thorough review of how customers entered the credit control process, what payment methods they used, what communication was sent to them and what was the result of this communication. During the investigation, we were able to identify the key drivers of customer dissatisfaction from the debt cycle.

Recommendation

It became evident that the company required an accurate measure of its collections activity on a regular basis. It needed to optimise the payment method of its customers to both reduce bank costs and minimise risk of non-payment. Its communications with the customer should be more timely and more effective in their tone.

Implementation

Brookstand worked with the company to ensure their staff were able to obtain the appropriate management information, encouraged customers to be on the best payment method and ensured the triggers, methods and wording in the communication were optimised.