Archives: Credit Managements

SG Credit Management have been providing service to a London based Insurance broker firm since 2015 and can tailor a programme to suit your precise business needs too.

Working capital optimisation continues to be a top priority for insurance brokers. Finance executives aim to bring down SG&A costs, thereby reducing the cost of processing per contract.

Most brokers hold a continuous improvement goal, driving them to find ways to eliminate unneeded waste in back-office operations. Back-office operational tasks especially phone calls, emails and other document processing are an important contributor to any company’s success but dealt with in-house, they run at a high cost. Results from outsourcing and streamlining these OTC processes, not only improves cost effectiveness and efficiency, but also frees up staff to move out of the back office to support customer-facing activities or fill needs elsewhere in a company.

Order-to-Cash (OTC) solutions from SG Credit Management, allow for higher efficiency in transaction processing as well as resolution of order entry mistakes, pricing disputes, billing errors and credit or collection issues.

This is why they have  to outsource the accounts function to a competent, professional, efficient, results driven firm, SG Credit Management.

We tailored a package including the following services:

• Creating debit / credit notes and sending to clients
• Credit control
• Payment processing including credit card secure payments
• Creating / updating details for client credit accounts
• Managing payments and allocating payments on the broker software system
• Reconciling insurer statements
• Raising insurer / client payment requests to Directors of broking firms for approval/action
• Sending out monthly remittance advices / statements to insurance companies
• Reconciling all broker accounts (client and office) monthly
• Debt recovery
• Producing monthly Broker Management accounts
• Producing Client money reconciliations for broker to FCA requirements

By doing this the client eliminated the problems relating to:

• Excess Staff overhead
• Management time dealing with sickness, holiday cover, motivational issues
• Time delivery

And could see clear benefits such as:

• Reducing overhead in budget and reducing additional management time on staffing
• Provision of an accountable delivery of service to agreed standards
• Removes hassle factor leaving insurance staff to focus on client centric activity

About SG Credit Management

Whilst particularly successful within the professional services market, SG Credit Management covers a wide variety of markets from fashion design and wholesale to construction, IT, recruitment, PR, architecture, accounting and legal. In all of these industries they effectively become the credit control function for their clients, responsible for collection of ledgers on an ongoing basis and in many cases, the entire order to cash process.

Contact us for more information.

One of our clients in the aerospace business had carried out maintenance on an aircraft owned by a Russian airline running up a bill of tens of thousands of pounds. The debtor refused to settle invoices, the aircraft was already back in their hands, and legal action was unlikely to get results.

SG Credit Management (SGCM) took a creative approach to the debt, investigating what ‘soft points’ the debtor may have. We quickly established that one of their aircraft regularly flies into the Czech Republic. SGCM contacted the debtor, threatening them with a specific litigation route that would result in their aircraft being impounded. The debtor made payment.

One of our clients was struggling to obtain payment of approximately £13,000 from a customer who was ignoring all contacts. The client was introduced to Simmons Gainsford Credit Management (SGCM).

SGCM investigated the debtor and found that he was using a fake name to run his business. Through negotiation and the threat of litigation SGCM managed to get the majority of the debt paid, however the debtor refused to pay the final amount probably under the impression that the client would be unlikely to go to court over a small fee.

SGCM carried out legal proceedings, recovering the full debt, plus interest, plus additional fees. The additional fees recovered meant that the debtor covered all costs of service, so the SGCM’s service to the client was free of charge.

One of our newest Credit Control clients has been with SG Credit Management (SGCM) for just over 6 months now, and did not previously have a structured collections service in place.

Over the course of the first 6 months, SGCM reduced the outstanding debt on the sales ledger by 96.5%, putting £193k in the client bank account (outstanding debt reduced from £200,000 to £7,000).

This improvement has been maintained so the average time it takes their clients to pay has improved dramatically.

‘We were recommended to look at credit control and debt recovery services by our accountants. This happened at a time when our work load had increased significantly meaning that certain elements of our work would be best outsourced so that we could concentrate on the provision of services to our clients.

Since October 2015 we began using credit control and debt recovery services. Our overall balance more than 30 days old reduced from almost £200k, to less than £10k. The average waiting time for payment of invoices has seen a 70% drop from 77 days in October 2015 to just 22 days by the end of August 2016. Cash flow has been boosted as a result of using this service.

Although credit control has been very successful (as demonstrated in the above figures), where debt recovery has been necessary, debts of £2,340.00, plus interest and late fees were also recovered.

I am very happy with the service and the fact that it has allowed us to focus on our core business.’

Read more about our Credit Control service or contact us to discuss how we can help your business.

“SG Credit Management’s service, manages to get our bills paid promptly whilst maintaining healthy customer relations. This allows us to focus on our core business in the knowledge that our cashflow is under control.”

Credit Control has been a part-time role at one of our clients, and had been looked after by the office manager with most contact being via email. As the office manager had other key responsibilities, credit control often did not receive the attention it required and customers tended to ignore the reminder emails sent. This affected cash-flow in the business and key staff were distracted from core business by becoming involved in collection activities.

Solution

SG Credit Management (SGCM) carried out a review of the full order to cash process with the client and helped implement key improvements to the process. A managed Credit Control Service was set-up with SGCM working under the client’s brand. All calls and emails were made and answered in the client’s name, so that the outsource was completely invisible to the customer. New systems were introduced so that reminder emails could be sent automatically to reduce administration in Credit Control. This meant that the Credit Controller’s time could be focussed entirely on speaking to customers by phone. The SGCM service was set up to make pro-active calls one day each week, but to respond to customer queries full-time.

Effectively the client gets the benefits of a full-time professional credit control department at a fraction of the cost. The service has now been running for over 2 years using the same SGCM Credit Control Manager. Strong relationships have been built with the client and their customers to the level that the service is now an integral part of the business.

Benefits

• Improved cash-flow
• Improved customer relations with more personal contact and queries resolved quickly..
• Reduced bad debt
• Sales ledger kept accurate as allocation issues resolved quickly
• The client is able to focus on their core business

“SGCM’s service has improved our cash flow without any negative effect on our customer relations. Most importantly the service allows me to focus on growing our business in the knowledge that the sales ledger is in safe hands.”
Safiah Ahmad, Managing Director

As the business expanded senior managers found that they were spending considerable time chasing up outstanding bills, distracting them from core business and having an adverse effect on client relationships. As cash flow suffered Avalon Fashions had the choice of recruiting a part-time credit controller or outsourcing to a specialist. Following discussions with SGCM, Avalon Fashions decided that outsourcing would give them a more reliable, flexible solution with the added benefit of access to specialist expertise.

Solution

The proposed service was for SGCM to effectively become Avalon Fashions’ credit control function, with service carried out under the Avalon Fashions brand. Whilst the ledger requires that the collection process needs 1 day per week effort, SGCM answer calls 5 days per week. Avalon therefore has a full-time credit control function for part-time cost. The SGCM Service focuses on regular phone contact with debtors and close liaison with Avalon to resolve queries and advise on credit terms. Ageing debtors are escalated to SGCM’s Debt Recovery service with legal process managed by SGCM’s solicitor if necessary.

Outcome

Avalon Fashions have seen a significant increase in company turnover since the start of service. During this time SGCM have reduced ageing debt by 50% whilst reducing admin for Avalon, and improving client relationships through regular contact and efficient query resolution. Outsourcing Credit Control to SGCM has allowed Avalon Fashions to focus on core business and continue growing in the knowledge that the ledger is being managed consistently by a team of experts.

About Avalon Fashions Ltd

Former model Melissa Odabash launched her first collection of designer swimwear back in 1999. Since then Melissa has been credited with re-introducing high fashion into the swimwear world. Avalon Fashions have two flagship stores in Notting Hill and Chelsea and distribute to over 250 luxury department stores worldwide.

“SG Credit Management did a fantastic job collecting historic debts, some dating back over a year and in some cases, even collecting interest on the debt so therefore receiving more than we had expected. I would definitely recommend using SG Credit Management as it has saved us a lot of unnecessary legal proceedings.”