case studies : mid-size firm
Client Type: Mid-Size, Self-Funding Firm
Challenge: Currently self-funding and in need of additional capital for growth and credit/collections support.
Solution: advance's team of professional credit experts lowered the company DSO (days sales outstanding) by eight days, which allowed a reduction in fees and virtually eliminated the bad debt that had been eating into profits.
This well-established southern firm had always self-funded its business. Its owner did not believe in bank debt and was suspicious of the fees and restrictions he had heard about with factoring and funding companies. As his market heated up, however, he found himself without enough cash to pursue his many sales opportunities. In addition, as his business grew, he was spending more and more resources on back-office tasks such as collections, payroll, and credit research.
By working with advance, this business owner met his challenges successfully. His business grew by more than 150% in just two years. advance's pricing structure was clear and effective and tailored specifically to the performance of his receivables. In addition, advance's team of collections and accounting specialists helped to straighten out his back office and allowed his management team to focus on sales and customer service. In one year, bad debt went from 1.75% to less than .25% — providing additional cash, which went directly to his bottom line.