The company in this example had decided to use two credit control outsourcing companies with each assigned 50% of the sales ledger. The intention was that competition between the service providers would give the best performance and service price.

Lack of knowledge, costly mistakes

Two credit control outsourcing service companies were already in place. Sterling was called upon to replace one of them as it had become apparent that whilst their staff were competent in the day to day collections, they could not deal effectively with ageing debts. This was made apparent when they made an erroneous decision, issuing a statutory demand against one of the client’s customers for a debt lower than £750. The debtor instructed a solicitor to set the demand aside, resulting in costs being awarded against the client.

Change for the better

Sterling took on their half of the ledger, working in parallel with the second remaining credit control service company. We had the resources and skilled staff at hand who had the ability to provide a complete service package. From credit control through to a separate debt recovery service for recovering delinquent debts, plus a solicitor working from our office. The solicitor gave advice on terms of business and technical disputes, with preferential rates should litigation be required. At the same time, the other provider had to rely on an external law firm working at a standard rate. Our client, seeing the benefits of our full scope of order to cash service decided to escalate any debt recovery or legal work from both halves of their ledger to our team to deal with.

Advantages shine

Further advantages of working with Sterling’s team quickly came to light. The competitor was achieving efficiencies by using their own software to manage the ledger, requiring that our client produce an export file and email this to them regularly. This meant additional admin for the client and that the competitor was often working on data that was out of date.

Sterling’s approach is to work directly on our client’s system via remote access, working as an extension of our client’s business. As well as always working on the same data this gives our client a real-time view of our work as we make notes on the system for all contacts made. We achieve efficiencies in automating the administration of reminder emails and letters by using our own software integrating with the client’s system.

Quality improves performance

Very quickly it became apparent to the client that Sterling was leaps and bounds ahead of the competition. Clear channels of communication, immediate updates on the client’s system, effective query resolution, and reduced admin for the client relating to our part of the ledger. Cash flow had improved and the DSO was better than it had ever been. We were asked by the client to increase the size of our team and be ready to take on their entire ledger. We were able to very quickly take on more of the ledger and within a short period of time had assumed responsibility for providing the credit control service outright.

Sterling subsequently worked with our client to take on further responsibilities including cash allocation and invoice production, freeing up resource in house to carry out higher value work. Sterling has continued to work in partnership with our client, managing the full ledger, collecting delinquent debt, and providing legal advice and litigation service as and when needed.

Outsourcing credit control to the right specialist can be more cost-effective, and flexible than using in house staff, and gives the customer access to a range of skills and resources only usually available in house to blue chip businesses. You have access to teams of experienced, qualified, trained and managed credit controllers who pool their knowledge and resources together. They are constantly looking for the best ways to keep managing your ledger as effectively as possible. That together with a debt recovery service and legal expertise all under the same roof allows the client to focus on core business while experts manage the sales ledger.

Streling Credit Management