Odyssey Technologies appoints Coface UK to tackle time-consuming collections process.
Odyssey Technologies
- Company: Odyssey Technologies provides PC repairs and servicing for both IT maintenance companies and private users.
- Business challenge: How to successfully collect payment from client organisations, without placing a disproportionate burden on the company's resources and time?
- Solution: Outsource the collection of overdue accounts to Coface UK, on a disclosed basis.
- Result: Coface UK's Collections Team has significantly improved the response from late paying customers, without burdening the in-house accounts department.
The Company
Established in 1995, Odyssey Technologies is an SME specialising in the repair of computer and IT equipment, including monitors, printers and communications networks. The company's technicians support IT maintenance companies, systems providers and private users.
Odyssey has a turnover of around £1million and is part of a group of companies, which also includes Rapid Hardware, Centric Solutions and Centric Hardware. Together with Centric Solutions, it also offers expert computer repair services for customers covered under Comet's extended warranty schemes.
The Business Challenge
As the IT sector experienced a slowdown in the last couple of years, the payment record of many companies slipped accordingly. Other, less robust companies, including a few big names such as Tiny, had simply not survived as the market contracted and competition became fiercer.
Many Odyssey customers, who had been paying between 45-60 days after receiving an invoice, had slipped even further back to around 70 days as they themselves experienced the cash flow problems caused by bad debt and late payment. However, as always, there was a difference between those who genuinely couldn't pay and those who simply wouldn't.
The Coface UK Solution
Odyssey's Accounts Department had already implemented a 'risk prevention' system of credit checks on new clients. However, senior managers recognised that extracting payment from some customers required constant badgering, a time-consuming process which was not yielding the right rewards. What's more, the sanctions available to credit controllers, such as legal action, placing a stop on goods and charging interest, were only feasible if the company was prepared to risk alienating or losing that client.
After experiencing traditional debt collection companies and deciding they offered a less than satisfactory solution, Odyssey opted for the professional partnership-based approach of the Coface UK collections team. Operating on a disclosed basis – collection agents declare they are working for Coface on behalf of Odyssey Technologies to emphasise the company has taken the next serious step in getting paid – Coface chase all outstanding accounts for a small percentage of the invoice value.
In contrast to many debt collectors, who operate on a UK basis, Coface UK's collections team can call on the added resources and authority of an international organisation which specialises in a range of other credit management services, including credit insurance, credit information and ratings. Naturally, this factor may not always guarantee payment but it's usually enough to focus the minds of persistent late payers.
In addition, as part of service, Coface sends regular progress reports to Odyssey, highlighting possible disputes before they sour the supplier-customer relationship.
The Result
After appointing Coface UK, Odyssey was quickly able to dispense with other debt collection services and Finance Manager, Justin Mills, has been delighted with the results.
"The best thing about the Coface UK collections team is that they are irritating - in the best possible way, of course. While some customers seemed happy to ignore calls from a Finance Director for months, Coface UK can really get under their skin. In fact, as soon as Coface UK becomes involved, we usually receive payment in a couple of weeks. Quite simply, they are experts in extracting money from late paying customers."
- Justin Mills, Finance Manager, Odyssey Technologies
