challenge: to deal with outstanding debts
Gumtree, part of eBay group since 2005, is the UK’s number one classified and community website. It brings together “buyers” (consumers looking for something) with “sellers” (businesses and people offering something).
It's everyone's local notice board – generating more than 250,000 new listings a week, and attracting 13.7 million visitors and 400 million page views a month.
As the business grew, Gumtree found it was spending increasingly more time chasing overdue payments. To improve its cash flow, Gumtree decided to outsource its credit control function to Arvato to benefit from Arvato’s finance expertise and track record in accounts receivable & debt collection services. The task was to develop a speedy and efficient process for improving cash flow and collecting outstanding balances.
solution: to dedicate an experienced team
To manage the outstanding debts, Arvato created a customised dunning and collections process and appointed an experienced, highly trained team of credit controllers and collectors to the Gumtree business. Individual team members were assigned to particular customers to strengthen the relationship with customers and provide them with a consistent credit control partner, which in turn supported process efficiency and maximised cash collection rates.
Timelines for dunning and collections were agreed and a sophisticated reporting system was established to keep Gumtree up to date with accounts status, payments and collection rates.
Significant debt reduction: collected approximately 70% of outstanding debts within a short timeframe
Major cash flow improvement: increased collection rates by more than 200% (2010 v 2009)
services: complete customer service
Complete Accounts Receivable and Collections Service
Credit control services
Suspension and un-suspension
Collection agency services
Regular credit control/collections reports