Case Study

Electrical Equipment Manufacturer

Transforming 3P Collections: A Smarter, Cost-Effective Approach

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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.

44%
Cost Reduction
10%
Blended Collections Percentage Cost
$1.25M
in Aged Receivables Resolved

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:

SVG
Growing Subsidiaries & Rising Costs

Growing Subsidiaries & Rising Costs

Expanding services led to using multiple third-party collection agencies, limiting economies of scale and driving up collection costs.
Lack of Visibility and Reporting

Lack of Visibility and Reporting

Without clear insights into overdue accounts and root causes, the client struggled to address issues proactively.
Uncoordinated Collections Efforts

Uncoordinated Collections Efforts

Multiple subsidiaries and overlapping vendors led to fragmented efforts and missed recovery opportunities.
Need for Long-Term Prevention

Need for Long-Term Prevention

The client sought a partner who could not only recover payments but also help prevent overdue accounts with proactive strategies.

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.

Case study
THIRD-PARTY COLLECTIONS

Recover More, Spend Less with Cadex

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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

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

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

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 AR
Reporting

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.

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Key outcomes from Cadex’s collaboration include:

10%
Blended
Collections Cost
Cadex’s approach lowered the overall collection cost across GAB and 3P collections.
33%
GAB Pre-Collection Success Rate
Early intervention by GAB recovered $686K from $2.1M assigned, reducing accounts needing escalation.
54%
of 3P Past Due Accounts Collected
Of the $2.3M placed in third-party collections, $1.25M was recovered.

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.

Why Cadex?

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Better Reach

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Better Guidance

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Better Tools

Interested in learning how Cadex can help improve your company’s cash flow?

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