Imaging Speeds Collections for Celadon
Adding digital imaging immediately cut time it takes fleet to collect outstanding bills.
JOHN BENDEL
TECHNOLOGY EDITOR
Truckload carrier Celadon added digital imaging to its technology toolbox and immediately cut the time it takes to collect outstanding bills.
"When we looked at imaging system return-on-investment, the biggest impact would be to reduce our DSO.'' said Mike Gabbei, Celadon's vice president, information systems.
"DSO stands for Days Sales Outstanding. Basically that means taking your yearly sales and breaking it down to a per-day average, then dividing that by your receivables," he said.
Gabbei provided a simple example.
"If we averaged a dollar a day in revenue and we had $30 in receivables, our DSO would be 30 days," he said.
Celadon is a 2,600 power-unit truckload carrier based in Indianapolis, Ind., specializing in loads to and from Mexico. The company has a record of accomplishment in emerging technologies.
For example, Celadon was the first truckload carrier to offer satellite tracking in the U.S., Canada and Mexico. It also launched one of the few trucking-oriented Internet businesses to actually show a profit, the web-based buying cooperative TruckersB2B.
Celadon has been working with Pegasus Transtech of Tampa, Fla., on its imaging system.
Did Celadon's collections improve because the Pegasus system gets bills out faster?
"That's one aspect of it," Gabbei said. "We've basically picked up a day to a day-and-a-half getting the invoices out our door. The other side of it is having tools at the desktop when we're talking to customers to collect outstanding receivables."
Gabbei laid out a typical bill-collecting scenario.
"In the manual method the credit and collection department would call a customer. The customer would say, 'I never received the invoice.'
"So we'd write up a request, a file clerk would go pull it, they would photocopy it, they would fax it to the customer. Credit and collections would call back two days later, Did you receive it?
"Yeah, I received it.
"Are you going to pay?
"It doesn't match our contract or our rate sheet.
"Well, let me go pull that," said Gabbei.
"We find out the customer is right. It doesn't match. We invoiced them wrong. So we call the customer back and tell him to short-pay the invoice. Or it did match and we tell him it matches," said Gabbei. "Let me fax you a copy of your contract."
Anywhere from four to eight business days may have elapsed in the manual process. Imaging allows collections to move much more quickly.
"Now what we do is keep that customer on the phone. We can fax or email from our desktop the contract, the rate sheet, the invoice and proof of delivery," he said.
"So that's where the days are picked up, not necessarily the back office functions. Just dealing with the customers and making sure the customers are getting the information they need."
Celadon's current imaging system also offers benefits in payroll, a driver retention tool.
"We're in a workflow system, so drivers are turning in their trip envelopes," Gabbei said, adding that Celadon uses TripPak Express, Brentwood, Tenn., to move driver trip packs to headquarters from truckstop drop boxes.
Imaging also provides customer service benefits where the driver is concerned.
"If the driver calls in and needs supporting documents, they can keep the driver on the phone, pull up the images, print them, email them, fax them to that driver," Gabbei explained.
On the billing side, Gabbei said, trip envelope documents such as bills of lading and proofs of delivery are now scanned.
"The documents necessary to bill the customer get pushed to a billing clerk," he said.
At night, supporting documents are automatically printed along with that invoice and stapled.
"Prior to the imaging system they'd have to sort through the invoices, find the manual bill of lading, proof of delivery; marry those up, staple them, fold them and stuff them," said Gabbei. "Now, they're all married up. All they have to do is fold the stuff them." He says imaging saves a day in the billing process.
What's next for Celadon?
Gabbei said Celadon is working with Pegasus on an accounts receivable workflow process that will apply rules to overdue accounts and, once again, collections.
"I have an invoice for customer 'A' that is 31 to 45 days past due. One of the rules I might set up is to email that customer a cover letter stating he has the invoice 31, 45 days past due and email him supporting documents along with that cover letter," said Gabbei.
"I might have a customer 'B' who has an invoice 45 to 60 days past due. I want to email that customer — or fax that customer — a different type of cover letter that's a bit stricter in nature and provide the supporting documents.
"I might have a customer that has an invoice 60 days or older and I want to create a workflow entry to the collector that's responsible for that account to manually follow up with that customer. It creates a workflow entry in that collector's queue that tells that collector the customer has an invoice 60 days past due, please place a phone call to that customer," said Gabbei.
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