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Solutions July 2005
Case
Study
Statement
Rendering
Co-mingling
Saves Client Money
Carroll
Independent Fuel Company in Baltimore
provides heating oil and other
petroleum products to 30,000 residential
and business clients. Several
times a month, a few employees
process invoices and statements.
“The people that were asked
to do that have other duties,”
says Dan Cahill, vice president
of sales for Webb/Mason, a Hunt
Valley, Md.-based distributorship.
“So their other jobs were
put on hold for statement processing.”
The
task wasn’t simple. The
statements varied: Some clients
wanted bimonthly ones, while others
asked for budget statements to
spread their payments evenly over
12 months. Also, the laser printer
Carroll used to process the statements
sometimes malfunctioned, adding
days to the cycle, increasing
maintenance costs and limiting
the fuel company to a generic
statement. “They had to
design forms around the limitations
of their equipment,” Cahill
says.
After
employees processed the statements
in house, they placed them in
mail trays and sent them to another
company to sort and deliver to
the post office. Carroll discovered
the statements weren’t being
sorted properly. “They weren’t
optimizing postal discounts,”
Cahill says. It was on this point—postal
discounts—and a few others
that Webb/Mason earned the fuel
company’s statement processing
business last year.
Webb/Mason
brought in National Data Services
(NDS) to make a presentation on
statement processing. NDS is a
Chicago vendor specializing in
direct marketing, statement processing
and database management. The distributorship
and manufacturer showed Carroll
how co-mingling its statements—mailing
them by ZIP code in bulk with
other mail processed by NDS—could
save the fuel company 6 cents
per piece, or approximately $1,700
a month.
In
addition, NDS’ solution
would improve Carroll’s
cash flow because statements would
be processed and mailed more quickly,
leading to quicker returns of
payments. “Previously, statements
would sit for a few days before
they mailed out, and that means
cash,” says Jim Renella,
vice president of NDS. “Cash
is king.” In addition, customers
now send payments to various regional
lock boxes rather than remit payments
to the fuel company.
The
bank retrieves payments from the
lock boxes, so Carroll has access
to funds in its account more quickly.
Carroll’s CFO was sold on
the statement processing system,
Cahill says.
During
Carroll’s busy season, from
October through April, NDS receives
daily invoice and statement information
from the fuel company via FTP
transmission. NDS uses an electronic
form template to create the statements
and invoices, then prints and
mails them within three business
days. NDS maintains a 3-month
supply of forms and envelopes,
and Webb/Mason stores a larger
quantity at its Chicago warehouse.
Each
month, NDS sends Carroll a CD-ROM
of back data embedded with exact
images of the statements and invoices
it processed and mailed. This
archiving system is helpful when
statements are lost. “Carroll
can pull that data and resend
it to customers immediately,”
Cahill says.
The
statement processing system has
other benefits: It reduced soft
costs, such as the time Carroll’s
employees previously spent on
bill processing. Also, it reduced
the number of statement pages
because NDS duplex-images the
documents and eliminated remittance
stubs on every page. Also, Carroll
now can selectively market to
segments or all their customers
by inserting buck slips in the
mailings.
“The
driver in all this was the technology,”
Cahill says. “The CFO of
Carroll wanted to make sure the
vendor was reputable and the data
was accurate.” NDS provided
beta testing for a few months
to ensure the CFO that the system
would work. It did. Now, Webb/Mason
is educating all its sales reps
in the Washington D.C./Baltimore
area about statement rendering,
using Carroll Independent Fuel
Company as a success story.
—Susan
Keen Flynn
1.
Just because a printer can manufacture
statements and invoices doesn’t
mean it can provide all the end-to-end
services associated with statement
processing, including database
management, mailing services and
archiving. Three years ago, Hunt
Valley, Md.-based distributorship
Webb/Mason offered statement rendering
to Carroll Independent Fuel Company,
Baltimore, through another supplier
and it failed. “Being a
vigorous salesperson, I went back
to the CFO and said, ‘I’m
going to do this to you again,’”
says Cahill, Webb/Mason’s
vice president of sales. “He
laughed and said, ‘Are you
kidding?’” But the
client trusted Cahill, and National
Data Services, a Chicago supplier,
has been providing statement processing
for Carroll since last fall without
a glitch.
2.
“Don’t be embarrassed
to ask for a complete schooling
in the print-to-mail industry,”
Cahill says. It’s as much
about information transfer, and
management and mailing as it is
about printing. “Find a
vendor willing to educate you,
and learn about the process,”
he says.
3.
Target medium-sized companies.
“If you want to dip your
feet in the market, do it at the
middle-market level because they
are probably doing statement processing
themselves,” suggests Cahill.
“There are a lot of firms
that struggle every month just
to bill their customers.”
