QUICKLY REDUCE ACCOUNTS RECEIVABLE ADJUSTMENTS, write-offs and collection time for a company with $1.2 Billion annual revenue and over 350 offices throughout the U.S.
Project Focus
Review revenue management operations at representative location(s) to identify collection performance barriers and opportunities, design a “high performance revenue management model” and plan for implementation throughout the company, and provide necessary implementation support as an alternative to a ~$60M technology solution.
Operating Benefits
- 64% reduction in revenue adjustments
- 55% reduction in suspended billing (>60 days as a % of net revenue)
- 42% reduction in accounts receivable >180 days
- 25% reduction in days sales outstanding (DSO)
- 25% productivity improvement
Results through the end of 4 months, post implementation
4 years post-implementation – original DSO >100 days is holding at 50 days
Key Changes and Benefits
- Refined revenue management model and training program for immediate performance improvement
- Used “principles based” approach to operations model design to permit implementation across the diverse business environments and systems of the company
- Instilled principles of “turnaround vs. deadline”; Focus on keeping current to avoid building backlogs and deterioration of A/R; Quality review at key points to minimize delays and write-offs; Position and train Supervisors for role of “coach”
- Incorporated continuous process review to achieve ongoing improvements in revenue management, service, quality and productivity
- Tested the validity of the new model in the poorest performing region resulting in advancement of that region to 2nd best revenue management performance of 23 regions in just two months
- Implemented the model in the 20% of regions that contributed 75% of all revenue adjustments and write-offs
- Maximized return on consulting investment by training and coaching 20 client employees as change agents to implement the new model and perpetuate improvements throughout the remainder of the company
- Developed measurement reports that can be analyzed and acted upon to maintain and improve performance
- Refined collections models and training program for immediate performance improvement
