Dear Crabby, 

I’ve been working as the credit and collection manager at a large heating & cooling equipment installation and maintenance company for the past 20 years, and about two months ago a new CFO came on board. From the start this person has been really turning things upside down, creating new departments and eliminating others, all in the name of rationalizing our people and resources. 

I was just informed that part of my department is going to be outsourced to a third-party billing company, especially the annual and semi-annual maintenance billings. I have always done these billings for about 1,000 of our maintenance-based customers. For about fifty of our largest customers, either the sales manager or I will give a call to let them know that the invoice will be forthcoming, adding a personalized touch to the process. 

Although I was not even consulted or given the opportunity to provide any input into this outsourcing idea, my biggest fear in outsourcing this part of our total billings is that it may make the process very impersonalized. In addition, I think this is the just the first step to my being pushed out. Any advice will be appreciated. 

Signed: Being Pushed Out

Dear Being Pushed Out,

Oh boy, not a good situation and I feel for you. Let me take a moment to parse this decision into a couple of different areas which may give you an idea of how to proceed. 

Although I’m not familiar with your internal billing process, if the annual and semi-annual maintenance billings require very little change, are routine, periodic, and have a fixed price, then perhaps the outsourcing can be performed more cost effectively. Of course, it depends on the platform and capabilities of the vendor but generally speaking, many companies that have thousands of regular and fixed priced billings use a third-party billing vendor who will do it much more quickly and cheaply. For those top fifty customers who require a personalized touch, I think you and your sales manager can still make the calls while letting the vendor process the invoices. 

However, my biggest question is, are sending out paper invoices necessary? Whether from you or a third-party vendor, paper invoices have been going by the wayside for quite a while. As much as possible, sending those regular maintenance invoices by email would be quicker, and certainly more cost effective than using an outside vendor. In addition, how are you taking payments for those invoices? Are customers still paying by check or can they pay by credit card or ACH? Here too, if many of your customers, whether commercial or consumer, can make payments to you on-line, all of that check handling will be eliminated. 

I think if you sit down and carefully map out every step of the billing process, there are probably many areas that can be rationalized in house, allowing you to not only keep control but to also show the new CFO your value in making your department a much more cost effective and efficient area of the company. My hope for you is that you will continue to refine your current billing, credit, and collection processes to the extent that you will be an indispensable part of the management team. 

Please let me know what happens. 


Dear Crabby is a credit, collection, and human resources advice column by Nancy Seiverd President CMI Credit Mediators Inc. Your thoughts and comments ( are most welcome!

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