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A Great Loss Prevention Idea for A/E Firms:
Peer Review of Your Credit and Collection Processes

by Andy Harmelin
President, A.I. Consulting, LLC
The practices of Architecture and Engineering are professionally challenging balancing contractual terms and conditions, with providing a professional and aesthetically pleasing design within budgetary guidelines.

Unfortunately, the design professional has to occasionally deal with a difficult or unhappy client. This client may feel that the architect did not design exactly what they envisioned, that some part of the work product was delivered sub-standard, that their budget was exceeded or disregarded, or simply that the project took too long to complete. Once a design professional starts down the path with an unhappy client it becomes a slippery slope, leading to lost revenues and possible litigation.

Fortunately many of these situations can be avoided with a small ounce of prevention in the form of a Peer Review of your Credit and Collection practices and procedures. Our firm has recently performed this type of Peer Review for several of our A/E client firms. As an independent third party we are able to evaluate the subject firm's credit and collection practices and procedures with a "fresh set of eyes". It has been said that "a peer review is as important to (a) firm's health as a physical is to yours."

We have developed the following Peer Review evaluation to better assess a firm's present credit and collection operations. The areas to be examined all pertain to boosting the firm's cash flows and preventing disputes. The evaluation consists of meeting with key operations and office staff to examine the firm's credit policy towards prospective clients, contracting process, routine collection efforts and key personnel involvement in the resolution of client issues and collection process. We interview each staff member involved with the following areas for about 30 to 45 minutes getting their feedback on what is working well and what needs improvement.

Credit Policy:
* Is there an in-place policy to ensure all prospective clients are credit worthy?
* Are all projects supported by contracts with clients?

Contracting Policy:
* Are contracts thoroughly scrutinized and deemed fiscally sound prior to services starting?
* Are there any side deals with clients, such as pay when, or if paid?

Routine Collection Efforts:
* We review your Accounts Receivable run and analyze for percentage over 90 days.
* We also look at past experience with delinquent clients and their payment history.

Key Personnel Participation:
* Are PM's aware of client balances?
* Do key personnel get involved with client issues?
* At what stage do they get involved?
* How do they deal with clients?

Typically, we take an objective and positive approach while interviewing the firm's employees with their responses kept in strict confidence. We record the firm's strengths, reaffirming good practices within the firm, and note issues that need modification, providing suggestions for change. Every effort is made to draw out as much information from employees in an optimistic participatory spirit while avoiding their fear and embarrassment. Our goal is not to pass judgment on a firm, just to help them improve. Sometimes we will tell a principal that they have good people but need a better process.

A good Peer Review helps to save the design professional from costly write-offs, as well as the expense and embarrassment associated with errors and omissions that could occur as a result of a faulty credit and collection program.


For Immediate Release

How A. I. Consulting Helped a National Architecture Firm Improve Their Credit & Collections Process

Philadelphia, PA – March 22, 2011 – When national architecture firm Francis Cauffman looked for someone to solve a debt collection problem three years ago, they had already encountered the consultant across the conference table.

Andy Harmelin, president and principal of A. I. Consulting, met Stephen J. Hegeman, managing principal at Francis Cauffman, when A. I. Consulting worked on behalf of another client to resolve a business issue with the architecture and design company. So when Hegeman realized he had a similar situation with one of their clients, he called Harmelin.

A. I. Consulting, which Harmelin launched in 2000, provides engineering, architectural and environmental companies in New Jersey, Pennsylvania and the Mid-Atlantic region with cash flow improvement by offering recovery of past due accounts, cash flow solutions and credit evaluation. Harmelin brings over 20 years of experience in the industry to his role at A. I. Consulting.

“I’ve worked with Andy for three years, but originally met him when he was on the other side of the table dealing with me on an issue for one of our clients,” said Hegeman. “What impressed me about Andy is that he is completely proactive, not just diligent – he’s completely on top of things. Our initial conversations were not about dunning us for something but were about addressing the facts and circumstances. It was a very positive relationship.

“We started working with him on basic collections, because I liked his focus on facts and circumstances which I believe served all of us well,” Hegeman said. “Andy would advise us if we were wasting our time, or if we were on the right track, and he got to the bottom of things quickly, providing us with very sound advice.”

A. I. Consulting worked closely with Hegeman and his colleagues at Francis Cauffman to address some outstanding debt collection. Harmelin’s company then helped the architectural firm identify process issues, conducted a peer review and developed a new strategy for the firm.

“A challenge that faces many design firms, such as Francis Cauffman, is the credit and collection function and its impact on the property and financial well-being of their firms,” said Harmelin. “My work with Francis Cauffman included introducing them to new credit and collection procedures, identifying potentially difficult new clients, showing them how to deal with difficult clients, as well as in-house training and periodic progress audits.”

Harmelin did the job so well that Francis Cauffman has far fewer debt collection projects for the firm than he did when they started working together.

“The real value A. I. Consulting brought us was the consulting and training, bringing best practices in credit and collection controls to our firm,” Hegeman said. “We had worked with some larger national consulting firms in the past, but Andy brought best practices to us that were significantly different, and significantly better, than we had received before, best practices that ensure we get paid on time and eliminate possible future problems.

“We’re practicing architects, not practicing debt collectors,” said Hegeman. “What A. I. Consulting gave us was the ability to focus on doing great work. The happier our clients are the happier we are, and Andy’s work allowed us to succeed in our own practice. Ironically, he didn’t sell us something that would keep us chained to him; he trained us in best practices and eliminated his need as a debt collector.”

Before launching A. I. Consulting in 2000, Harmelin worked for several engineering and architecture firms in the Greater Philadelphia area for over 30 years. The company works to improve their client’s cash flow and bottom line by developing and customizing solutions that produce maximum results.

A 1970 graduate of Drexel University with a bachelor’s degree in Business Administration, Harmelin is qualified as an expert in the field of credit and collections by the United States District Court for the Eastern District of Pennsylvania, and is on the roster of TASA, a nationally recognized firm providing experts to attorneys in support of litigation.

Additional information about A. I. Consulting is available at



A.I. Consulting LLC.
P.O. Box 611
Narberth, PA 19072
Office: 610-667-3422 Fax: 610-667-3425