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Client

A Midwest cooperative providing quality propane, oils and lubricants for residential, commercial and agricultural use.

Challenge

The company services thousands of customers’ propane needs in 19 different states. Although propane delivery is typically made in the spring, many customers wait until the following fall heating season before paying for fuel services. That makes for a lot of monthly delinquencies.

When an account became delinquent, it wasn’t reported to the corporate office until 61 days past due. Then, it remained in accounting without action for another 60-90 days. After the collectability had deteriorated, three in-house collectors would start the follow-up process. Their workload was too high, the collectability of accounts was too low, and as a result, the recoveries were poor. At that point in the vicious cycle, they’d employ an attorney who generated fair results, but at a premium cost to collect.

Solution

TekCollect partnered with the company to implement a strategic, cost-effective accounts receivable management program. We encouraged the internal collectors to focus efforts on slow-pays, and place accounts with us at 90-100 days total. By shifting internal efforts to early follow-up, we significantly reduced the number of accounts that ever go beyond 90 days and require our services.

We also implemented a proprietary Account Manager System so that branch managers can view their pertinent stats, and the corporate offices can view the stats of the entire organization, online. By making early submission and tracking easy, we further minimized the amount of time accounts remain without pursuit.

When we make contact with debtors, we refer them back to the internal collection team to ensure consistency for their customers, promote positive rapport, and ensure uninterrupted service. Since 2004, the company has placed $1.9-million in delinquencies with us, and we’ve recovered 53%. They have sought additional custom programs for larger account balances, as well other facets of their business including a credit card program.

© 2009 TekCollect Corporation