Apparel

Seamless exit from the factoring arena.

75+ Employees

$100+ Million Annual Revenue

Overview

A large apparel firm came to Axim in 2008 to explore the benefits of exiting their factoring relationship and outsourcing their entire AR department processes to Axim, including customer order approval, first party invoice collection and deduction management. The challenge was to efficiently and seamlessly move out of the factoring arena with minimal effect on customers, to reduce costs and improve personal relationships with each account.

Client Pain Points

The client felt that a factoring solution was too expensive for their business. Having been factored for many years, they had no internal credit or collections department. They needed to either staff their own department or look for a company to fill the need.

Solutions Implemented

Axim tailored an exit strategy by providing a seamless transition out of factoring, ensuring that no customer was inconvenienced by the move. We quickly input all outstanding receivables into our proprietary software and notified each customer of the change and the benefits it would bring. We communicated with customers in our client’s name, so to the customers and the client’s in-house personnel, the exit was a non-event. Order approval was accomplished in real time through the elimination of lag due to the submission of data to and from the factor. Just due invoices were collected from each customer in a friendlier manner, creating an atmosphere of cooperation and enhanced service, from purchase order entry through to invoice payment. The client now receives payments directly from each customer, then applied by client personnel, eliminating the duplicate accounting that was necessary with the factor. Axim and the client were motivated to resolve each dispute quickly to eliminate any barriers for payment, so the customer deduction issue common to the apparel industry was minimized.

Results

The relationship began in 2008 and continues to flourish today. Bringing the AR function to Axim reduced costs by over 50%, with bad debt nominal and within budget. The receivables perform extremely well, with less than 2% over 60 days past due. Additional benefits include eliminating the need to staff and monitor an internal AR department and the negative effects associated with employee turnover.