How Carver cut their overdue balance by 49% and made collections a business-wide focus
Carver, a specialized hospitality task force agency, focuses on placing high-level professionals within the hotel industry. Darnell Long, Corporate Controller at Carver, recognized the need for a robust AR solution to streamline their collection processes and improve cash flow.
Darrnell Long
Corporate Controller
20% reduction
in DSO from 46 days in September 2023 to 37 days in August 2024
49% decrease
in total overdue balance in less than a year (September 2023 to August 2024)
15 hours saved
per month through automation
Mission statement
Carver connects the finest talent with the right hospitality industry jobs.
FTEs
230
Industry
Hospitality Staffing
Offices
Atlanta, GA
Stack integrated with Upflow:
Intuit QuickBooks
Challenges before Upflow
Before implementing Upflow, Carver's AR processes were characterized by significant inefficiencies.
As Darnell explained, "We’d send the invoices through QuickBooks and just hope and pray they pay. If they didn't, then we’d get on the phone and try to contact them or send emails manually." This manual approach was time-consuming and prone to errors.
The nature of Carver’s business meant something needed to be done quickly. Connecting professionals with work means they often pay out to contract workers in anticipation of receiving payment from their hotel customers. “We're fronting the work and anticipating getting paid 30 days later. And in some cases, we don't”, summarized Darrnell.
Added to that, Carver faced the issue of having limited visibility into overdue invoices, which had big implications. “There were some special clients who received discounts for paying within shorter terms. But they were still getting those discounts even if they didn’t pay on time. So we were actually foregoing revenue by not having a tool in place and having a very manual process”, notes Darrnell.
Darrnell further emphasized the importance of addressing these challenges: "AR was clearly the biggest issue when I joined Carver and my first 100-day plan was to make sure, first of all, that I got a firm understanding of what our outstanding receivable amount was and how to reduce it”.
We’d send the invoices through QuickBooks and just hope and pray they pay.
Why Carver chose Upflow
Carver's decision to go with Upflow was driven by the sense that the solution could address the specific challenges faced by the organization. As Darrnell explained, they were seeking a solution that could:
Provide flexibility for the way Carver wanted to approach AR: "We needed something that would allow us to have our finger on the pulse and make it what we wanted it to be." Upflow's flexibility allowed Carver to work in the way they wanted - fitting their unique workflows rather than having to redesign their processes to fit a new tool. As an experienced operator, Darrnell already had a strategy in mind for how he would approach collections. Upflow seemed to offer a greater level of flexibility in the way it was set up, compared to other tools Darnell looked at.
Automate as much of the repetitive, manual work as possible: From the get-go, Darrnell and the team were looking for a tool that could free up their time. "Upflow gave us the opportunity to automate more of the process and take the manual day-to-day stuff off our hands." By automating routine tasks, Upflow freed up valuable time for the AR team to focus on more strategic activities.
Provide in-depth tracking and visibility: Unlike previous methods, which relied on manual tracking or spreadsheets, Upflow offered a centralized platform to track invoices, payments, and communication history. This enhanced visibility allowed Carver to identify potential issues and take timely action.
We needed something that would allow us to have our finger on the pulse.
Carver's favorite Upflow features
Centralized Dashboard: The platform's centralized dashboard provides a clear overview of key metrics, such as overdue balances, DSO, and payment trends. As Darrnell mentioned, "The dashboards help us identify activity.” This enables Carver to identify potential issues early and take proactive steps to address them.
Customizable Workflows: Upflow's flexibility allows Carver to create tailored workflows that segment their customer base. What’s also interesting is that these workflows include a number of different communication methods, including automated email reminders, manual call checkpoints, and even certified letter checkpoints for the most delinquent accounts. For Darrnell it’s a case of ensuring each customer account is getting regular reminders, and that these reminders are personalized for maximum effect, while also putting safeguards in place: "We need to be contacting them every 15-30 days or so, just as a reminder…We set the workflows up so that there is a hold on the account to prevent future placements of consultants so that delinquent accounts don't continue to run up a balance with us.”
We set the workflows up so that there is a hold on the account to prevent future placements of consultants so that delinquent accounts don't continue to run up a balance with us.
Outcome 1: DSO reduced by 20%
DSO, a key metric measuring the average number of days it takes to collect payment after a sale, is particularly important in the hospitality industry, where late payments are considered the norm.
However, Darrnell was not content with simply accepting industry norms. He believed that a smarter approach to collections could lead to significant improvements in cash flow, and see Carver’s DSO come closer to their net 30 payment terms.
"It [DSO] never should be too much above 30. So 45 days was weird to me. I understand that that's what has been historical, but we've shown that that's not a hard and fast thing. It's just that we were not doing the work and that's because we didn't have the tool to be able to do it. But now we do with Upflow."
Since implementing Upflow, Carver has achieved a 20% reduction in DSO, from 46 days in September 2023 to 37 days in August 2024. This reduction has had a profound impact on Carver's business, improving cash flow that’s helped them reinvest in the business and look towards the future with confidence.
Outcome 2: Total overdue balance decreased by 49%
On top of the DSO reduction, Upflow has played a crucial role in significantly reducing Carver's overdue balance.
By implementing targeted collection strategies and improving communication with clients, Carver has achieved a remarkable decrease in its outstanding debt. Their total overdue balance has been reduced by 49%, and the amount overdue for more than 61 days has decreased by 58%.
This significant reduction has improved Carver's financial health, reduced the risk of bad debts, and strengthened its overall financial position.
Outcome 3: 15 hours saved per month through automation
Carver has adopted a hybrid approach to collections, combining automation with manual follow-up. This strategic approach leverages the time-saving benefits of automation while retaining control over complex or sensitive cases.
Carver has sent on average 175 automated emails per month, saving them an estimated 15 hours per month. That’s close to two full days per month saved through automation.
This significant time saving has allowed the AR team to focus on more strategic activities, such as analyzing key performance indicators, identifying trends, and implementing more targeted and segmented collection strategies.
While automation plays a crucial role in their collection process, Carver recognizes the importance of human interaction, particularly for complex cases or clients requiring personalized attention. Approximately 24% of follow-up emails are still sent manually, allowing the team to tailor their approach to each individual situation.
This hybrid approach demonstrates Carver's commitment to intelligent automation. By strategically using automation where it can save the most time and effort, Carver has optimized its AR processes, improved efficiency, and enhanced its overall financial performance.
Outcome 4: Improved relationships, both internally and externally
Upflow has not only improved Carver's financial performance but has also strengthened relationships, both internally and externally.
Upflow has fostered collaboration between the finance team and other departments, particularly business development. By involving the business development team in the collection process, Carver ensures that client relationships are maintained and strengthened.
As Darrnell explained, "If the client is non-responsive, I always make sure to include the business development person so that they can reach out because they're the ones that foster that relationship." This collaborative approach has prevented potential damage to client relationships and has fostered a stronger internal culture of teamwork.
Upflow has also enabled Carver to maintain a customer-centric approach to collections. By automating routine tasks and streamlining communication, the finance team can focus on building stronger relationships with clients. As Darrnell noted, "Business is built on relationships. And we need to remember that even as accountants. We don't just count the numbers. We don't just make the bottom line balance. We are part of the bigger picture." By combining technology with a human touch, Carver has been able to maintain positive relationships with clients, even during challenging times.
Business is built on relationships. And we need to remember that even as accountants...We don't just make the bottom line balance. We are part of the bigger picture.
What’s next for Carver on Upflow?
Carver aims to further optimize its AR processes by reducing its DSO to align with its 30-day payment terms.
"I want to be down to about a 32 or 33 day DSO. I believe we can do it, especially when we implement the native payment platform within Upflow," noted Darrnell.
Referring to Payments by Upflow, Darrnell can see the value of this next step. Offering a seamless payment experience for B2B transactions, enabling faster payments and improved cash flow, Payments by Upflow will soon allow Carver to:
Enjoy instant, automatic payments and reconciliation: Streamlining payment processing and reducing manual effort.
Make payment a great customer experience: offering a wide range of online payment methods, facilitating repeat purchase, fostering trust and improving the customer experience.
I want to be down to about a 32 or 33 day DSO. I believe we can do it, especially when we implement the native payment platform within Upflow.
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