MSPARK is a privately held national provider of direct mail, analytics, and digital marketing services. With over 4,000 customers, access to more than 22 million U.S households and with 98% household penetration in non-metro geographies, MSPARK is highly competitive and rapidly growing. MSPARK sends out thousands of invoices each month and must collect millions of dollars in credit sales; an immensely important task that directly impacts the cash flow and working capital that MSPARK needs for continued growth.
MSPARK was struggling while they were using a combination of their Sage 100 ERP system and spreadsheets to manually track and manage outstanding receivables. This was a cumbersome and inefficient process that slowed this fast-paced company down keeping them from their goals explained Kristy Criswell, Director of Credit and Collections at Mspark.
“It was very difficult to manage accounts receivable because we could not sort an aged trial balance by amount,” said Criswell. “That means collectors could have up to 200 pages of information to sort through and our highest dollar accounts were buried somewhere inside those 200 pages, not necessarily at the top where you would want it to be; making it a very long and tedious process.”
MSPARK was experiencing something that many companies have to learn the hard way, ERP systems are helpful in many ways, but they are limited in their ability to help companies optimize their accounts receivable management processes. “The accounts receivable function is a useless feature in an ERP system. We have over 4000 clients, $18 million per month in total accounts receivable and 15,000 monthly invoices, so without easy streamlined functionality, we were struggling to manage our accounts receivable and maintain DSO goals.”
SEARCHING FOR A SOLUTION
With their accounts receivable problems growing as the business continued to bring on more customers and send out more invoices, MSPARK set out to find a solution. Paystream Advisors recently reported that companies who automate their credit and collections process spend 300% more time soliciting customers for payment than companies using manual or non-automated processes.
Once MSPARK made the decision on their new automated accounts receivable software, they have found this to ring true. MSPARK experienced a significant reduction in the labor related to collections and has been able to reallocate their resources and reduce the cost of staffing their accounts receivable team. Prior to implementing the software, the company had four full time employees and one part time employee focused on collections; today MSPARK has three full time collectors and one part time employee managing accounts receivable– something that would have been impossible without the application. The company has also seen amazing results including a 26% reduction in DSO, taking their DSO from an average of 38 days to 28 days – getting paid 10 days faster. They also reduced past due invoices from 18% down to 2% – a reduction of 88% in just one year.
THE SOLUTION BEHIND THE SUCCESS
Upon logging into the software, the collectors at MSPARK are given a prioritized action list, or “to-do” list, which tells them exactly what they need to do, when to do it, and why, with all of the information they need to complete the activity in one place. As collectors work through the list, items drop off and are replaced with new tasks.
“It allows us to spend much more time calling customers for payments rather than sorting through a 200 page report to figure out who we need to call next. We are more efficient because accounts are prioritized based on the criteria that we’ve configured within the system.”
The software also automates communications making sure reminders and past due notices are always sent to the right people, at the right time so they can focus on settling disputes and other more critical activities.
Emails can be set based on account, credit class, or invoice specific rules. For example, MSPARK can set the system up where all customers who have invoices due in the next three days receive a friendly reminder email automatically and, as those invoices age – the system will continue to send reminder emails to customers and schedule follow-up phone calls for collectors based on the defined rules. Once payment is received, the system automatically closes any open actions related to that invoice. Further, it automatically tracks and stores inbound emails from customers which are then stored within the system providing a 360-degree view of every customer interaction – both inbound and outbound including email, phone calls, disputes, and more.
“Lockstep Collect works beautifully! It is very user friendly and can be sorted in any manner that you choose! It allows us to have current information on all of our clients including payments, aging history, communications, and new invoices. This system is more efficient for us! We no longer need to waste time working with spreadsheets and aging reports and the staff at e2b is always most helpful and willing to assist however they can. We simply couldn’t be happier with Lockstep Collect and recommend it to anyone that needs a better way to manage their accounts receivable.”