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Case Study

Outsourcing Collections & Order Processing (42% Savings)

Client Profile

The client is a US leading commercial interior design firm, focused on premium solutions for companies of all sizes, from start-ups to Fortune 500. In addition to helping its customers design and conceptualize their work spaces, the company is a leading distributor of multiple major brands within the office furniture space, including desks, seating products, filing cabinets, tables, and accessories, as well as solutions for collaborative areas. 

Business Challenge

Faced with rising salaries and talent shortages in the market, as well as challenging labor laws in their state that further drove up the cost of employment, the company was interested in outsourcing multiple back office roles to support their future growth in a more cost-effective and agile way.

The identified roles included:

  1. Collections: currently operating with a team of Collectors who focus on accounts with balances greater than $5,000, the company was initially interested in leveraging outsourcing for accounts with balances of less than $5,000, which was not being worked on by the current Collections team.
  2. Order Processing: this role handles the creation of customer orders which convert from quotes to orders. The role involves creating purchase orders for suppliers, based on details of product, assembly and delivery instructions in the order form, generating the PO from the MS Dynamics 365 system, following up with the suppliers on delivery dates, and advising clients on the status of their delivery. Specifically, a big percentage of these orders (~6,000 per year) are considered “transactional”, defined as products not requiring installation or assembly. The client was interested in leveraging outsourcing for these types of transactions, freeing up the current internal team to focus on more complex tasks.
  3. General Accounting: The company’s F&A operations had a lean team that was often turning over, impacting the quality and timeliness of the work being performed. The company needed consistent support across a range of activities including month end closing, gross margin analysis by project and service/product, P&L variations analysis, AP accruals, Payroll processing, and cash flow forecast. 

In addition to the recruiting, retention and cost challenges that were inherent in the local labor market, the organization had limited visibility to its business operations and financial performance, often reacting to issues “after the fact”. The client prides itself on its “high touch” customer service model, and wanted to implement real-time operational reporting that highlighted transaction volumes, team productivity and any sales order issues to accelerate cycle times and improve customer satisfaction. 

Solution & Results

The company had begun evaluating various outsourcing solutions, including both nearshore and Asia-based options. Ultimately, the CFO and his team decided to go with Auxis nearshore model from Costa Rica given its well-known advantages including time and geographic proximity, strong talent pool, and innovation focus. 

Key results achieved included:

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Outsourcing Collections & Order Processing (42% Savings)