Case Study
Electrical Equipment Manufacturer
Transforming 3P Collections: A Smarter, Cost-Effective Approach
Implementing a pre-collections team helped the client reduce third-party collections costs, recover more funds, and address issues earlier in the process.
With a complex portfolio of products and services, a U.S.-based manufacturer faced challenges in streamlining collections across its subsidiaries. By centralizing their accounts receivable (AR) teams, they selected Cadex as their exclusive partner for third-party collections to improve recovery for their diverse product and service lines.
Despite the complexity, Cadex delivered consistent results, integrating a General Auditing Bureau (GAB) pre-collections service. By addressing accounts at 90 days past due, Cadex
increased recovery rates while minimizing customer disruption. The strategy emphasized clear communication, professional third-party collections, and transparent reporting, optimizing the client’s financial operations.
Centralizing Collections with Cadex Has Been Game-Changing
ABOUT THIS CLIENT
The client is a publicly traded, multinational corporation founded in the 1800s, headquartered in the U.S. Midwest, and earning annual revenues nearing $20B. Serving the oil and gas, utilities, chemical, HVAC, and aerospace and defense industries, this Fortune 500 company delivers a range of AI and automation services and manufactures industrial, commercial, and consumer equipment.
ENGAGEMENT SUMMARY
Contract Start Date: 1995
Industry: Manufacturing/Engineering
Delivery Location(s): USA
Languages: English
SERVICES APPLIED
- Third-Party Collections
- General Auditing Bureau
- Custom Reporting
The Challenges
As the client’s business grew, so did the complexity of their AR management. They faced the following challenges:
Growing Subsidiaries & Rising Costs
Lack of Visibility and Reporting
Uncoordinated Collections Efforts
Need for Long-Term Prevention
The client needed a partner with the right technology and expertise to manage a variety of legal, credit, and procurement scenarios, while also providing actionable reports to identify root causes, align processes, and reduce reliance on collections. The client decided to consolidate services with a proven partner, Cadex, to optimize their AR processes and address the growing complexities.
Recover More, Spend Less with Cadex
The Solution
The client offers a range of products, from small parts to multimillion-dollar equipment and service contracts. Each pre-collection or third-party collection account assigned requires Cadex to understand the product, identify causes of delinquency, and recover funds tactfully. As a true partner, Cadex has adapted its strategies over time to meet the evolving needs of the business and its customers.
Here are the key solutions implemented to help the client centralize its services and cut costs:
Shared Services and Consolidated Support
Cadex became the client’s sole third-party collections vendor, streamlining knowledge and processes to identify issues end-to-end, perform root-cause analysis, and run large outreach campaigns, achieving economies of scale. This approach consolidated 148 accounts with $2.1M assigned to GAB and $2.3M placed in third-party collections.
Third-Party Collections
Cadex streamlined collections across subsidiaries using automated reminders, self-cure options, and experienced AR specialists to accelerate account resolution, ultimately collecting $1.25M from $2.3M of principal assigned. Additionally, Cadex began addressing overdue accounts 45 days earlier than the client’s in-house teams, speeding up the resolution process.
GAB Pre-Collections Services
Cadex introduced the General Auditing Bureau (GAB) to manage costs and maintain customer relationships.
GAB addressed high-value, past-due accounts early, resolving $686K from 148 accounts with personalized, hand-signed letters to prompt timely responses and prevent credit holds.
Custom A/R Reporting
Each month, Cadex provides key updates on new accounts, statuses, and recoveries, alongside cost analyses to show the impact of process and policy changes. This regular reporting helps the client understand when an account is uncollectible and why.
The Results
Combining a pre-collections (GAB) team with formal 3P collections improves recovery success rates, increases operational efficiency, and reduces the client’s collection agency spend.
Key outcomes from Cadex’s collaboration include:
This partnership reduced accounts moving to third-party collections, cut costs, and closed cases faster, demonstrating Cadex’s ability to adapt strategies and deliver impactful results.