Transformed Systems Using Analytics to Reduce Overdue AR by 30% for PE-Owned Auto Parts Distributor

Challenge

A private equity-owned auto parts distributor had inefficient internal finance processes, causing excessive cycle times that resulted in poor customer experience and overdue accounts receivable.

The company needed to transform their AR functions to optimize the collections strategy and improve the customer experience.

Approach

  • Assessed current state credit and collections processes and identified areas for analytical enhancement
  • Leveraged advanced algorithms to predict risky customers and aligned collections strategy by segment
  • Analyzed technology solutions available and managed end-to-end implementation of cloud solutions
  • Optimized staffing model based on operational improvements and reduced process and billing errors
  • Deployed cloud-based billing/payment portal

Results

I.

Reduced outstanding AR by 30% in 5 months

II.

Implemented technology to reduce credit decisioning by 85%

III.

Reduced 70% of paper statements within 12 months

IV.

Identified 10% improvement in enhanced working capital and enhanced ability to expand credit capabilities

Experts