Ledger Management Solutions (LMS)
There are a variety of Ledger Management Solutions (LMS) is a fully managed solution offering the monitoring and collection of debts while maintaining positive customer relationships. Outsourcing ledger management is ideal for small-to-medium enterprise’s (SMEs) that want to improve their cash flow and reduce the risk of incurring more customer debts on their general ledger.
This service involves placing monitoring software on the SME’s company server or PC, so ledger data can be transferred to and managed by the Ledger Management company. In the initial stage, a debt collection/ ledger ‘clean-up’ may be required to address any outstanding items that are at risk of turning into bad debt. Any invoices that have been outstanding for 90 days or more will automatically trigger a ‘reminder’ that payment is past due. The SME and management company work together to establish a series of client notifications urging payment. If any customers who have not made payment a notification of potential legal action will be issued.
ledger management services include developing a management strategy for your general ledger to generate cash flow for the business without having to resort to hiring a debt collector. This is a cost-effective and proactive alternative to employing a collection agency which can cause damage to customer relationships. Our approach is to implement a customer credit management system that reduces manhours spent chasing payments and mitigates future bad debt on your accounts.
There are 2 main service options to choose from:
Option 1: Full White Label Ledger Management
White label means that your clients will always be contacted in the SME’s name.
This ledger management solution has some unique features:
- The service will be delivered in the SME’s name so there is no requirement for you to contact clients. All communications (letters/emails/texts) will be customized with the company’s brand identity (Logos, letterheads etc)
- All incoming calls will be answered in the SME’s name, so phone lines will need to be adapted accordingly
- Management of all payment plans, settlements etc will be dealt with according to rules agreed in advance (NOTE: debtors will pay all fees directly to the SME)
- There will be no mediation attempted when disputes arise, all client contacts and actions required will be reported to the SME
- If efforts fails in generating payment and the SME approves, the debtors can be contacted by Debt Collection or Ward Solicitors.
Option 2: Short & Fixed Period Ledger Management
This service is for SME’s who want to be able to access professional collection agents at short notice and for a short / fixed period. This is an ideal option when a SME is experiencing a temporary staff shortage.
Features of this service include:
- A similar set up procedure as Version 1, full ledger management
- Uses are ‘Turn On – Turn Off’ model giving SME extra flexibility to cover temporary staff shortage
- Professional agents will receive specific sectoral training for SME
- Work on SME’s ledger will commence for an initial month period to gain experience
- SME can then access professional collection agents with one week’s notice
- Fully trained staff are always available
- Minimum purchase is one month with a small monthly retainer fee
- One week’s notice is required to ‘Turn On’ service
What are the Benefits of Outsourcing LMS?
- A SME who avails of professional ledger management services will see an improved cash flow and a significant, measurable reduction in days sales outstanding (DSO).
- This is an ‘always on’ service so the SME will not require backfill when staff is missing due to sick leave, holidays etc.
- A very cost-efficient alternative to hiring debt collection or credit control personnel
- A SME seeking financial assistance can be given enhanced access to funding when they show that their general ledger is being managed professionally
- Flexible system allows the SME to nominate specific clients who should not receive the notification reminders
- Management of all client contacts including: setting up and managing payment plans / settlements / debtor fees / advice – recommendation for legal collections etc.
- Services are 100% compliant with the new General Data Protection Regulation (GDPR)
Our dedicated team of specialists can advise you of the best ledger management solution and tailor it to your business. For more information and a free consultation, please Contact Us today!Contact us now for further details