Client Profile

The client is a leading provider of global information and telecommunication solutions for the air transport industry. It works closely with every sector of the air transport community – innovating, developing and managing business solutions for them.

Business Challenge

The client was facing challenges in managing its cash collections due to sales disputes, missing contracts or purchase orders, billing issues, delays in sending invoices, misapplied credits, to name a few. The top 20 percent of its customers contributed to 80 percent of the company’s debt. The debt contribution from the remaining customers was also building up. The combined debt burden was severely choking the client’s cash flow.

WNS Solution

WNS adopted a four-pronged outcome-based solution methodology in which it was entitled to bill the client only if the solution was successfully executed. WNS initiated the project by creating a defined collection process and strategy with an objective to arrest the delinquent trend. It is observed that resolving past due balances early in the delinquency cycle keeps the debtor’s delinquency in line with targets and objectives. This minimizes a greater risk of the debtor slipping into severe delinquency. WNS followed this guiding principle.

The methodology comprised the following four strategies:

  • Developing Process Understanding
    In order to build the desired process knowledge, the team created end-to-end process documentation for the core collections process and other allied activities like soft suspension, termination and so on, which would impact the end collections process. This document, which WNS created from scratch, laid the platform for the entire process.

  • Conceptualizing and Planning the Collections Strategy
    The development of this strategy involved two steps:

    • Account Segmentation
      A clear identification and categorization of customer accounts enabled WNS to focus on those accounts, which had the highest chances of recovery, or for which collection was difficult but possible.

    • Debt Profiling
      The criticality of the debt amount was determined by two main factors: The outstanding period and past due amount. The receivables were then categorized into various aging buckets depending on the time that had elapsed from the due date. The classification of accounts receivables helped identify the customers who take longer to pay, so that the client could restrict sales to such customers and reduce risk of bad debts. As WNS’s strategy began to show results, the client gradually handed over customers with higher debt amounting to USD 13 Million to WNS.

  • Automating the Debt Tracking Process
    Initially, the follow-up activity was managed by referring to an offline spreadsheet-based past due aging tracker. However, WNS’s Technology team developed an online tool, which facilitated real-time customer debt tracking and increased productivity and efficiency of follow-up activities.

  • Realizing Allied Objectives

    • Customer Education
      Through the collections process, WNS’s agents educated the customers about the various means of accessing their invoice and alternate payment methods like Direct Debit, Direct Deposit and Wire Transfers. Converting traditional billing and payment customers to a paperless, automated solution enabled the client to save on cost of collection and also reduce the number of overdue accounts.

    • Cleansing of Customer Database
      Through sustained efforts and by leveraging online and offline resources, the team was able to improve the accuracy of the contact database from 30 percent to 98 percent.

    • Cash Application
      WNS took over the cash application activity for the client’s set of accounts in Dec. 2011. Within six months, the unallocated cash was reduced from USD 5.6 Million to USD 2.5 Million.

    • Dispute Management
      While negotiating with customers, who were going through a financial crisis or faced billing or service issues, the collections team offered various custom options, like late fee waiver, part debt waiver and staggered payment terms, to customers based on fixed plans approved by the client

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