10-15% Of All Your Sales Will Result In Invoice Discrepancies...
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ccording to industry wide averages.
And on average, only 7% of those discrepancies will be resolved in your favor.
RRG’s A/R Consulting and Recovery services have more than DOUBLED this number for many of our clients to 14+%, increasing their cash flow by MILLIONS of dollars.
With our combination of strategies learned from decades of experience, we can resolve those invoice discrepancies smoothly, getting you the cash you’ve earned. Whether they are from deductions for shortages, returns, post audits, unearned cash discounts, and more – we make sure that your incoming cash flow is as healthy as it can be.
Most companies don’t realize how much money that should be going to their bottom line… isn’t.
For example, few companies realize that: Unapproved Deductions Erode Sales By 3%
In fact, according to new information released by the Credit Research Foundation, roughly 3% of all accounts receivable are unapproved customer deductions. This is a huge problem for your bottom line that is routinely overlooked in the course of normal operations.
Further, 5% of open items in accounts receivable are short payments. And companies that sell to retailers have the most serious deduction problems.
Together, these represent a worrisome erosion of sales. This issue persists partly because of the time and expense required to address deduction problems.
Observes CRF: “While credit and A/R managers are increasingly aware of the money tied up in customer deductions, they are also aware of the time and effort needed to resolve them. In many cases the work has multiplied to a point where it is disproportionate to the resources available to tackle the problem.”
One way to alleviate this problem of tying up your staff to work on only a small percentage of the total A/R is to outsource the resolution to a reliable, reputable, results oriented company.
Information that CRF deems perhaps the most significant statistics of this project illustrates this point. “Our investigation of deductions,” CRF says, “shows that 64.7% of respondents write-off between 71% and 100% of the customer deductions. Astonishingly, nearly 10% of respondents write-off over 95% of the short payments.”
How Outsourcing Keeps Customer Deductions From Eroding A/R & Corporate Profits
Outsourcing allows a company to concentrate on its core business. It’s also a cost-effective way to audit write offs and to help recapture the lost profit in A/R that is ignored and missed.
Many companies now view their receivables as a major investment and manage them as an investment portfolio. This is ideal for companies with restricted access to capital, and the receivables can be managed so that they make the greatest possible contribution to the company’s financial performance.
An outsourcing company is an excellent way to help a company manage their A/R. Outsourcing has been proven as a credit and accounts receivable resource for companies of all sizes. Most importantly, the business of A/R outsourcing is performance, not cost driven.
Deductions are the bane of many companies, as they drain profits like nothing else.
Money that should rightfully be yours vanishes into thin air.
Prior to working with RRG, one major Grocery Manufacturing company had a deduction recoup rate of 5%. RRG managed to review their accounts and boosted that to 16% in just a few months.
That means prior to working with us, they were receiving $12.5 million for every $250 million in deductions.After, they were recapturing $40 million for every $250 million.
That’s an increase of $27.5 million for every $250 million in deductions- an improvement that went directly to their bottom line.
