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Medical supply company

accounts current improves 33%

medical supplier

22,000+ customers

1 receivables solution

About the Client*

  • $130+ million medical supply and service business.
  • 22,000+ customers.
  • 40+ locations throughout Canada, U.S. and Mexico. 

*Due to the sensitive nature of the data, the company name has been omitted from this study.

The Challenge

The company had a decentralized collection function with no credit work performed on its
customers.  Management sought a solution to its receivables issues, including a high delinquency
rate, with 22% of its receivable balance greater than 60 days past due.

The decentralized collection process caused both receivable chaos and unnecessary bad debt expense,
including 6-figure losses from allowing customers to purchase for months without paying.

The Solution

  • Client hires TCD to manage the A/R portfolio and solve receivables issues.
  • Immediate integration of TCD’s proprietary SMART system to manage receivables internally, utilizing the tools and benefits of SMART technology.

Initial Actions

  • Determine high risk customers.
  • Institute credit checks to instantly qualify/disqualify credit customers.

Managing Days Past Due

  • Hold orders at an agreed-upon past due period and delinquent customers are put on interest-bearing installment notes to timely pay off delinquencies.
  • Manage all active 90,000 unpaid invoices with collection activity beginning from 1-15 days beyond terms.

The Results

Ongoing management of the trade receivables, resulting in:

Reduction of Past Dues

  • Over 60 day balance dropped from 22 percent of sales to less than 3 percent.
  • Borrowing costs savings totaled in excess of $235,000 per year.

Increased Cash Flow

  • Cash flow increased by $1.5 million per month, allowing business growth.
  • Regular cash flow from the $2 million in installment notes written; 85 percent of notes were paid without third party intervention/cost.

Cost Reduction

Percentage current increased from 58 percent prior to 91 percent with TCD.

Improve your receivables

1.800.451.0164 (US-Canada)
1.651.451.0164 (International)
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Measurable Results

Accounts Receivable management, optimized automation and expert guidance.

Optimize AR

The Credit Department is the first and only true credit management outsourcing firm in the U.S., managing trade receivables for companies worldwide. We have worked in more than 100 industries to bring about change and dramatic results in our customers’ order to cash cycles.

As your strategic business partner, we become a cohesive and transparent component of your daily operations — whether you have an internal credit department or not. We also work with private equity groups to increase the value of portfolio company receivables to maximize cash flow from the asset. Our solutions integrate easily and cost-effectively with corporate systems within 24-48 hours.

If you’re ready to take control of your trade receivables management — and gain access to real-time cash flow forecasting — it’s time to contact The Credit Department.

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