Knowledge

Major Media Company Reduces Costs by 60%

Problem:  All businesses face accounts receivables challenges, but few faced the amount and degree of complexities as one multi-billion dollar media and advertising company. To the credit department, that meant hundreds of accounts receivable due at any given time and millions of dollars being exchanged, with very small staffs to manage it all. Collecting that debt, while still maintaining those client relationships, became a near-impossible task. And for a company of this size and stature, the “traditional” method of placing delinquent aging accounts with multiple receivables management agencies simply didn’t work. It offered little more than mixed liquidation results, high collection fees, and bad debt write off costs. The company required a modern, more professional approach.

Solution: Revaluating the traditional, attack-first method, the Altus approach first began with a Rapid Creditor Analysis, which quickly aligned with the company’s goals and priorities, examined their account portfolios and identified their specific A/R needs and market challenges. Using this insight, Altus then introduced and customized its state-of-the-art, two-phased recovery program called Commercial Accounts Receivables Express (C.A.R.E.) designed to reduce the need for traditional collections and prioritize maintaining healthy customer relationships.

Through the C.A.R.E. program, customers were first contacted by Altus’ trained customer service representatives—not a collector or computer program—and made aware that Altus was a partner of the media and advertising company and will be assisting with their accounts receivables. Billing awareness was professionally and politely reinforced, and healthy client relationships were nurtured by identifying, adjusting and resolving account dispute issues, reducing delinquency. Powerful technology through Altus’ Business Intelligence Dashboards kept the client constantly in the know about where all accounts stood, even at a moment’s notice. This disciplined structure ensured only truly serious collection issues were escalated to third-party collections, eliminating unnecessary collections costs and resolving delinquencies faster than ever before.

Result: Days Sales Outstanding (DSO) was reduced, recoveries were accelerated, and customer relationships were improved. Within the first year of implementing Altus’ C.A.R.E. program, Altus cut the company’s east division’s collection costs in half and increased their liquidation to nearly 40%. Because of those tremendous results, Altus’ C.A.R.E. program was implemented across all regional markets, and the partnership remains strong today. The solution that Altus delivered resulted into continuous improvement to the media and advertising company’s overall cash flow management and has improved their liquidation of accounts placed to approximately 58%, with overall cost reduction of 60%.

 

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