Transcript Challenge Questions

Challenges Discussion
Questions & Responses
A/R
• Do any of you charge late fees/interest
charges? – How do you
invoice/collect? Who has the ability to
waive/forgive?
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Yes, by marketing, finance
Objective – to change customer behavior
Charge Finance charge
Sales or finance – waives/forgive
Calculated % they will collect, remainder in
bad debt reserve
A/R cont
• Days only calculated on days beyond terms
• Have reports that tell when disputes are valid
• A certain % charged per annum: calculated
after payment
• Primary goal is to change/speed customer
payment habits
• Some customers prefer late fees to timely
payments
Dispute Resolution
• Do you have a team dedicated to dispute
resolution, or is it the responsibility of the
A/R Analyst to resolve all disputes? Does
anyone have website dispute processes?
• Most have A/R rep + Sales
• Account Resolution Manager
• None on website
EDI Discrepancies
• If a customer EDI tenders a rate, do you use
that rate or default to contract rate? What
then do you do about discrepancies?
• N/A to most in group asked
• EDI tender vs contract
• Customer only pays amount tendered
• Resolution – Sales/rates
Cash App
• Do any of you accept on-line
payments? What tools do you use?
• Generally yes. May be thru bank or financial
institution
• Depends on type of online portal used
• Uses Skipjack where customer enters info
from a website link, accepts for prepaids
only
• Accepts credit cards
• Don’t keep crdit card info onsite, utilizes
ACH debit & credit
Cash App (con’t)
• Accepts a lot of credit card activity, initiates
payment,
• Uses payment ach for cc info storage &
maintenance
• Process disputes faster if customer uses
their website for payments, disputes, etc.
• Will waive finance charges if customer uses
website
• Chargebacks happen, not huge numbers,
usually on retail customers, most credit card
info on commercial business
Remittance Advice
• If a customer does not provide
remittance advice, what have you found
to be the best solution?
• Send email or call the customer, don’t just
apply funds to oldest
• Pushes application issue back to brokers
• Still has cash app/deposits at 300+ terminals
• Avoiding misapplication of funds is critical
Resolving Credits
• What is your policy and process for
resolving credits on accounts (unidentified
payments, over payments, duplicate
payments)? Is customer notified? If no
response, what do you do with the credit?
• Notify customer
• If no response will try to contact customer, if
no claim then they declare it to the state
• Will refund the money, no outstanding
credits unless customer is significantly past
due, some judgment involved
Resolving Credits (con’t)
• Cut checks within 7 days of receipt of funds
is SOP
• Others find frustration internally with how to
best handle funds on account
Collections & Credit
• Hearing more about Brokerage
divisions. Are the same Collectors
used for the asset side as well as
brokerage? How are the brokerages
set up? As wholly owed sub, LLC, or
completely independent? Is their DSO
calculated separate or together with
asset side?
• No broker experience in group
How Collectors Split
• How their Collectors are split out.
Examples: sales region, dollar
amount? Are the Collectors in a group with
the Billing area? Do they use automated
software to organize their collections?
• Regional w/switches every two years
• No assignment – Assigned daily
• Shifts staggered to cover all time zones
• Software is used with data/time/person
• Outsourced
How Collectors Split (con’t)
• Assigned to Sales/Collections Group
• By product, or state & national accounts
• By brackets/buckets (i.e. to 40 days, then >
40, etc.)
• Size of account
• No set delineation-size of portfolio per team
• High profile/National
• Geographic/Salesperson
Outside Collection Svcs
• Success/shortcomings of using
outside collection services
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Language barriers
Technology i.e. file sharing
Administrative work
Expensive
Theory: Changing agencies more frequently
keeps them on toes
• To measure performance – use more than 1
O/S at 60 days or have exhausted all efforts
• Recommend minimum of 2 agencies
• Placement between 15 & 100/240 success
dependent on age of receivable
Outside Collections Svcs
Success Factors(con’t)
• Implementation of agency/customer
relationship
• Implementation available on accounts
transferred, access to
system/communication
Third Party Collections
• Collect inside until 30 days past
due/outsource after 30 days
• Small amounts that stop
communicating/success in “jump starting
communications
• Recovery rate bad if you don’t push invoices
to 3rd party in timely manner
Collecting Past Dues
• What are your 3 best practices you use
to collect a past due account?
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Bill electronically via email
Auto bank drafts
Collection calls within 3 days of due date
Security to collect on
Replace bad debts with wire immediately
Place account on hold
Master Service Agreements
• What is your policy/success rate on
obtaining signed Master Service
Agreements and/or Rate Addendums?
• Mostly tries to get signed agreements
• No business without agreement
• Change rate hit or miss on getting new
addendums in
Exposure on Non Asset Brkrs
• How do you determine maximum
exposure on non-asset brokers or
brokers in general? Is a different credit
model used to score and limit?
• Same collectors for brokerage
• No brokerage experience in group with this
question
Credit Lines/Limits
• Do you count unbilled revenue against
a customer's available line of credit?
Do you include revenue in transit?
• Would like to but access to info is limited
• Rail doesn’t have a limit per se
• Yes
Reviewing Credit Limits
• How often do you review credit limits?
What triggers review?
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Limits are not necessarily reviewed
Worthiness is reviewed annually
FISK and D&B triggers may sort
When customers change programs
When credit limits are reconsidered
Inactive customers are purged, so reactivation triggers review
Often customers will have multiple accounts – need to be
viewed in whole
• (30-90%) of revenue result in an action
• Credit hold is visible throughout company
Temporary Credit
• Temporary conditional processes for
credit establishment. For how long do
you allow them to go on temporary?
• Only in cases as a “bridge” for operational
situations
• If carrier makes a mistake, temporary
conditions may apply
• No business difference
Invoicing
• Customers who refuse to go paperless on invoices
or require originals....what is your process? Do you
have set processes in place or negotiate on a per
customer basis?
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Educate customer throughout life cycle
Sending surveys, emails
Encourage electronic & other services
Sales does get involved
Customer wants co. to do the work & support
heavy back-end processes
• Very few on paper
Sending out Statements
• Do you send out statements and if so
how often and when?
• Available, but on demand, not typically sent
regularly
Electronic Invoicing
• Electronic invoicing to customers: Giving them options to
immediately review invoices, pick and choose the invoices that
they want to pay and transfer that payment directly from their
account to the carrier account in one step.....anyone doing
that? How's it working? Are you a using "3rd party" billing
provider or your own? What are the liability issues to be aware
of?
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One co parcels out/ Inhouse vs 3rd party
Collaborative effort in company
OLB – register cc, but customer pays
File sizes
Can submit disputes and get copies
Freight payors
Electronic Invoicing(con’t)
• ___3rd party agents can access co’s systems to see
open statements; 3rd party customer edit info or file a
dispute
• Online standard regulation for paper
• Issue of quality control – vendor usage – non-linked
systems disputes
• Additional transactions has led to more effective
collections, less outsourcing required
On Line Web Invoicing
• On line Web based Invoicing with options to pick
and pay automatically via directly through bank
accounts. Is anyone doing this? Tips to share?
• Yes at ship CO. site-customer can see all open invoices, can
dispute, can pay online. Issue –no remittance details; for
example check comes from CO X, but pays for CO –Y, so we
don’t know who/what it’s for; direct wire-process to receive and
automated; internal wires generated
• 3rd party billing – account may dispute- the challenge is that
payment processing service – leads to dunning letters &
regular customer exposure due to delays, marketing materials
sent out to be proactive, educate customer. Helped drive up
awareness and compliance.
Payments
• "You get paid, when we get paid".....
what do you do?
• Not applicable
• Go back to the contract terms which does not
include this as a condition
Other Solutions
• Partial weekly payments instead of monthly
• Auto-payments set up if outside of terms
• Tighten availability of product/service if not within
terms
• Establish CLEAR terms upfront – credit terms are
not negotiable
• Get logical
Over/Duplicate Payments
• How do you manage overpayments and
duplicate payments on customers accounts?
• Some return overpayments right away or
after certain period of time
• Some retain if customer is past due
• Customer asked if can be applied to oldest
invoice
• Question asked if sent for escheatment
• Escheated to the state where customer
incorporated or resides
Overpayments/Duplicates(con’t)
• If true overpayment and a customer in good
standing does whatever customer requests,
if past due, negotiate
• Question: do your credit apps/agreements
allow for offset of credit balance to unpaid
balances?
Credit Card Payments
• Success/shortcomings of credit card
payments
• Costs absorbed-not passed on to customer
• Expensive! But used successfully to
increase sales, collections, decrease DSO ,
speed up payment
• Most are accepting
• Fees are an issue
• Credit cards are last resort payment process
• From new customers
Drafting Payments
• Success/shortcomings of drafting
payments
• 50% using ACH mostly pushed from customer, few
actually pulled or proactively used ACH as a
payment form
• Success of use of electronic payments has a lot to
do with the mindset of the credit dept towards
electronic payments
• Suggestion - Get wire payments-cannot return
• Get Authorization