Meridian Building Products: A Top Collector, a Privacy Slip, and a $180,000 Outsourcing Proposal

It is mostly a process problem with one conduct issue attached. The data points that way:

• 35% of past-due dollars are in dispute, mostly over missing proof of delivery. That is not a collections failure; it is a fulfilment and document-control failure upstream. Collectors cannot collect a dollar the customer is legitimately withholding. Fixing POD capture and dispute resolution within 48 hours attacks more than a third of the problem without a single extra call.
• 82% staffing for five months, with two vacancies. DSO drift of 7 days on a $62 million book is roughly $1.2 million of extra receivables. Understaffing plus a rising dispute load explains most of the 31% growth in 60-plus balances. Priya's low promise-recording rate (60%) is partly a capacity symptom - collectors under pressure skip documentation.
• 8 of 40 holds without approval (20%). That is an authority-control gap, not an individual failing. If the ERP allows a hold without approval, people will take the shortcut.

Priorities, in order:

1. Clear the POD backlog and set a service standard for dispute resolution - highest dollar return per hour of effort.
2. Fill the collector vacancy; backfill the analyst role with a temporary contractor focused on cash application and dispute logging.
3. Enforce the hold approval in the system so it cannot be bypassed, then audit monthly.
4. Only then look at call productivity.

Handling Priya's conduct first while ignoring the 35% dispute rate would punish the symptom and leave the cause intact.

Separate the conduct issue from the performance issue and deal with each in its own conversation.

The disclosure. Telling a customer's receptionist that the account is going to collections and will affect its credit rating is a privacy and conduct problem regardless of whether it is technically a breach of PIPEDA - personal information about the owner or the company's credit standing was disclosed to an uninvolved employee, and the statement was also inaccurate (the account is 34 days past due and no referral was approved). Steps:

1. Same-day conversation, documented: state the standard (no discussion of account status, credit action or credit rating with anyone other than the authorised contact), confirm she understands it, and record it in the file.
2. Written warning if this is a first occurrence, with a clear note that repetition is disciplinary. Do not terminate a productive collector over a first, coachable incident - but do not leave it undocumented either.
3. Send a short apology and clarification to the customer from you, not from Priya, and confirm the account is not referred.

The promise recording. Treat this as a performance standard with a number attached: promises to pay must be entered in the ERP on the same call, target 95%, measured weekly for four weeks. Explain the business reason - unrecorded promises mean the next collector calls blind and the broken-promise rate stays invisible.

Retention. Priya is your highest producer; losing her would deepen the capacity problem. Give her a reason to stay engaged: make her the lead on the POD/dispute backlog, which uses her customer knowledge and removes the frustration that likely drives the shortcuts.

Test the premise before writing the cheque. The proposal assumes collectors are spending their time on 1-to-30-day accounts that a dialer or agency could handle. But 35% of past-due dollars are in dispute, and the 60-plus bucket is growing 31% year over year. Outsourcing the freshest bucket does not address either problem, and third-party contact with customers still in dispute will damage relationships the sales team depends on.

Cost check. $180,000 a year on a $62 million portfolio is about 0.29% of sales. If it recovers the whole 7-day DSO gap ($1.2 million of receivables), the carrying cost at 7% is roughly $84,000 - the spend does not pay back on carrying cost alone. It only pays if it prevents bad debt; the business case must show that.

Recommendation: do not outsource the 1-to-30 bucket. Spend a portion of the money on the actual constraint.

• Two contractors for six months, focused on POD retrieval and dispute closure (~$70,000).
• A dispute-tracking workflow in the ERP or a simple ticketing tool (~$20,000).
• Keep the rest as contingency; revisit outsourcing only for accounts over 90 days with no dispute, where third-party pressure is appropriate and cheaper than internal effort.

Metrics to commit to, reviewed monthly:

1. DSO against the 42-day target, and DSO excluding disputed dollars.
2. 60-plus as a percentage of total AR (currently rising - the key trend line).
3. Percentage of disputes closed within 48 hours.
4. Promise-to-pay capture rate (target 95%) and broken-promise rate by collector.
5. Holds and third-party referrals without approval: target zero.
6. Cost per dollar collected, before and after the change.

Present it as an experiment with a 90-day review, not a permanent vendor commitment.