For the last few posts, we covered credit management and the complexities involved with it.
https://faoblog.com/processes-ar-credit-management-6/
Let’s look at another interesting process:
Customer Account reconciliations
This process is one perfect candidate for outsourcing / back office work. It covers both processing / back office work and also voice related calling.
One interesting customer that I did some outsourcing for found this process very beneficial. This customer had about 4 million direct customers, about 50000 retail customers and about 20 big customers in the US. For the direct customers, the average sale size was about $50, recurring on a monthly basis, for the retail customers about $10,000 a month and for the larger customers, about $200,000 per month.
Their total turnover was about $ 20 billion, with a write-off amount of almost over $600,000.
When we started following up with individual and retail customers, in a span of six months the annual write-off run rate was reduced to almost $200,000. We also saved them in terms of labor arbitrage on about 40% of their total cost, across six units.
And this could be made possible by doing accurate customer reconciliations.
The calls and the follow ups added the needed value.
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