Profit Fix #5: Got Accounts On Credit Hold? Collection Agency Chasing Down Unpaid Bills?
How many invoices are being sent to collections by mistake?
How many of those result in a credit hold?
What if I told you that 3 out of 4 of those cases could easily be avoided?
This article expands on Profit Fix #4 about slow invoices and is another game-changer for our partners when it comes to collections, client relations, and cash flow.
Here’s an unfortunately common scenario:
> CS Agent: “Hi, this is George from BestTechService, how can I help you?”
> Client: “Hi George, this is Matt from NiceFoodJoint. I need a technician to come ASAP to check our combi oven please.”
** CS agent checks CRM **
> CS Agent: “Hmmm, sorry, Matt, but I see here that you’re currently on credit hold.”
> Client: “I’m sorry? Why would we be on credit hold for?”
> CS Agent: “The invoice, No. 123653 from 40 days ago, is still unpaid sir.”
** Matt checks his bills **
> Client: “Hmm, George... We didn’t even receive that invoice. It’s not on file.”
> CS Agent: “Oh, again... I'm sorry for the confusion, then. But still, I’ll need to have this resolved by collections and approved by the district manager.”
> Client: “Wow… Really? Ok, you guys do you, but my combi oven can’t wait until then, you know? I’ll call someone else!”
This may sound like an
outlier scenario, but if you’re processing hundreds, or even thousands, of work
orders a day, you know that it’s more common than we’d like it to be. And this
is costing mid-market companies a small fortune!
Not only was the missed
work order for a couple of grand and is now in a competitor’s pocket, but now
that invoice will go to a third-party collection agency that will take 25
percent as their cut, make unfriendly calls, and ruin relationships with legal
And now, the district
manager will have to try to win the account back—that is, if they even get over
the embarrassment and pain of doing so.
A relationship that took
months or years to build, can be trashed in minutes...
… And statistics say
that an account on credit hold is probably not coming back anyway.
Boy... What a mess!
So why does this even
happen? And, most importantly, how can
it be solved?
We’ve seen it happen
mainly because of relying too much on automation, without enough human
And this is how it
Most of the invoicing is
automatic these days, which is good. But a big disconnect might happen for
something as simple as:
- There was a change in
the accounts payable email address, on the client-side.
- The vendor didn’t
update the CRM with the proper email where to send the invoices.
- An invoice was sent to
- The CRM automatically
marked an invoice as “done” even though the client never got it.
- No one checked that
the client did get it.
- 40 days later the CRM
automatically marked the account as “credit hold”.
automation are AMAZING, except for when they're not, right?
Now to the good part: how can this be solved?
At Origo, we’ve deployed
a “revenue recovery” remote team for
one of our leading partners and reduced the collections being
handled by a third party by 75 percent!
Think about it, three
out of every four invoices that were previously going to an external collection
agency are now being handled internally—by their remote team—bringing forward
multiple six figures in cash flow for them every month.
And the other benefits
Not only did we collect
MORE—because we’re picking up issues earlier when relationships are still on
the sweet side. So, there are no threats made, and no middle fingers being
thrown in the air. But also, there’s no “collection commission” either! Because
it’s not a collection service. It’s now part of their remote team’s day-to-day
Our partners now have a
dedicated remote team in place, with a process that actively watches their
accounts, the status of payments, and that proactively reaches out to their
clients, sorts due invoices, and solves disputes.
And client relationships
are not harmed. If anything it’s the opposite! Clients are taken better care of
and feel significant that there’s someone that follows up on things for them.
And when we take care of
all the standard invoicing for our clients:
- They have fewer
disputes and fewer third-party collections
- They have better cash
- Their in-house billing
team is massively FREED UP to take care of the more custom and complex invoices
for key accounts
- Their billing managers
- Their executives smile
As you can see, it’s a
complete paradigm shift and one that we’re thrilled to be bringing to mid-market companies.
We’re already helping
industry leaders adopt this model, and would love for you to be next.
So, we’d like to extend
you an invitation...
After processing around
ONE MILLION work orders over the last three years, we have enough DATA to
assess where a business could be leaking profits in 30 minutes or
We’d like you to take a
free run through our “Profit Score Quiz”
to find out how much money you could be saving, and how much your cash flow
would improve by keeping most of your collections in-house, instead of with a
And again, this is just
one of nine other profit leaks that we’re plugging for our partners.
The last time we ran this quiz with a company out of New York,
we uncovered six figures leaking in profits for them. Per month!