Credit and collections for managed service providers can be a daunting task considering the complexity of a typical invoice for these types of companies and the sheer number of invoices they receive. A typical invoice for such a company can span from months to years for the services they provide, many of those invoices have thousands of line items. On top of that, a majority of companies, regardless of their industry, do not have the proper number of AR professionals working in their accounting department for effective collections.
Most credit and collection professionals will tell you that they spend too much time prioritizing accounts and researching information and don’t spend enough timesoliciting customers for payment. Sometimes it seems that hiring additional employees is the only way to get ahead of the game and keep up with all the paper work, but improved credit and collections for managed service providers can be found another way.
Below is an example of a managed service provider who was able to improve their credit and collections processes without taking on the extra overhead associated with hiring new employees.
Systems Maintenance Services (SMS) provides technology integration, maintenance, and asset management services to more than 2,000 customers across the nation and deals with more than 3,000 invoices every month. Despite their best efforts, the company’s four full-time collectors were struggling to manage their accounts receivable due to the common problems explained above. Their inability to quickly prioritize their accounts and access information resulted in a DSO of 67 and significant cash flow problems. Man power was not what the company lacked, they just lacked the proper tools for efficient credit and collections.
Systems Maintenance Services implemented credit and collections software for managed service providers in 2012 and gained significant efficiencies in their AR processes without having to hire additional employees. In the first year they saw amazing results including:
- A reduction in DSO from 67 days to 40 days (excluding just two of their difficult accounts). That’s a 40% reduction!
- The company is now getting paid 27 days faster than the previous year – almost a full month faster!
- In their first year after implementing the software, the company continued to grow, adding another 1,000 customers without expanding its staff to keep up with the additional invoices.
- The company was able to reallocate half of one employee’s time to other, more critical business activities.
Check out this YouTube video to hear from Systems Maintenance Services themselves.
“We selected Anytime Collect because it allows us to centralize all credit and collections information with instant access to current account aging, invoices, and payment history. Additional we have CRM-like capabilities to document phone calls, email communications, and other related collections activities”
- Steve Defenbaugh, Systems Maintenance Controller.