Based on the situation provided, here is an innovative strategy that ABC company can consider to recover past overdue and regularize future credit collection:
Step 1: Conduct a comprehensive analysis of the current credit collection process and identify the loopholes that lead to delayed payments. This step may require a dedicated team and can take 2-4 weeks.
Step 2: Based on the analysis, develop a new credit collection policy that is more stringent and aligned with the industry’s best practices. This policy should include guidelines for customer credit checks, credit limits, payment terms, penalties for late payments, and the escalation matrix. This step can take 3-4 weeks and may require external consulting services.
Step 3: Communicate the new credit collection policy to all existing and potential customers via email, phone, and in-person meetings. Emphasize the importance of timely payments and the consequences of non-compliance. This step may require additional resources and can take 2-4 weeks.
Step 4: To recover past overdue payments, consider offering customers a one-time settlement plan that offers a discount on the outstanding balance if paid within a specified period. This initiative may require a budget of USD 100,000 and can take 2-3 months.
Step 5: Implement a credit monitoring system that alerts the credit recovery team of any late payments, and automatically escalates the issue to the senior management of the clients. This system should also enable regular tracking of customer credit scores and flag high-risk customers. This step may require a budget of USD 50,000 and can take 1-2 months.
Step 6: Establish a customer loyalty program that rewards customers who consistently make timely payments with exclusive discounts, free upgrades, and access to premium services. This program should be communicated to customers via email, phone, and social media. This initiative may require a budget of USD 25,000 and can be implemented within 2-4 weeks.
Step 7: Regularly review the credit collection policy and the initiatives implemented to ensure they are effective and efficient. Make necessary changes based on the feedback received from customers and the credit recovery team. This step should be ongoing and require dedicated resources.
Estimated Timeline:
Step 1: 2-4 weeks
Step 2: 3-4 weeks
Step 3: 2-4 weeks
Step 4: 2-3 months
Step 5: 1-2 months
Step 6: 2-4 weeks
Step 7: Ongoing
Tentative Budget:
Step 4: USD 100,000
Step 5: USD 50,000
Step 6: USD 25,000
Note: The budget for steps 1-3 and ongoing reviews of the credit collection policy will depend on the size and complexity of ABC Company’s operations.