Cash & Liquidity Management

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Unlocking Cash at FCI FCI wanted to improve its DSO position, and lacked a system which would provide the company with a comprehensive and accurate picture of its accounts receivables at any one time. It sought a solution which would establish a consistent, transparent workflow for end-to-end transaction processing and provide a centralised view of collections, as well as enhanced reporting. This article describes the system which was chosen and successfully implemented, and the significant benefits that have resulted, including unlocking cash previously tied up in overdue payments.

Unlocking Cash at FCI

by Donald Callahan, Director Cash Management and Treasury, FCI, USA, Inc.

FCI’s credit and collections department consists of 44 employees worldwide, within a regional structure, so each subsidiary in Europe, North America and Asia takes individual responsibility for its own receivables activities. The firm utilises MFGPRO, a global manufacturing ERP system distributed by Epicor, throughout the enterprise.

FCI was experiencing large volumes of past due payments in some of its business units, which resulted in a high working capital requirement, and recognised that DSO (Days Sales Outstanding) metrics could be improved. These issues were largely due to a lack of streamlined processes surrounding the order-to-cash cycle.

Organisational challenges

Due to the organisation’s decentralised approach to credit and collections processing, it was not always easy for senior management to gain visibility over customer engagements and employees’ daily activities and priorities.

Management now has an accurate snapshot of essential credit and collections data at any point in time.

Furthermore, the company lacked a standard approach to reporting of trade receivables. This proved to be a challenge because it prevented the organisation from gaining a comprehensive and accurate picture of its account receivables at any given time.

Consequently, FCI required a solution which would establish a consistent, transparent workflow for end-to-end transaction processing and provide a centralised view of collections. A key consideration was to provide enhanced reporting in order to help management make better informed decisions, as well as contribute to more precise business forecasting.

Solution

In implementing an automated solution, FCI set objectives for significantly reducing the value of overdue receivables, as well as considerably lowering its DSO by achieving improved data accuracy rates and adopting a more methodical approach to collecting overdue funds.

FCI discussed its business concerns and priorities with a selection of potential business partners and decided to select SunGard’s AvantGard Receivables to help streamline its order-to-cash processes. By relying on the solution’s proven ability to generate strategic and highly organised work queues automatically, and produce mass correspondence based on this information, the company expected dramatic cost-savings and a rapid return on investment. In addition, AvantGard Receivables had the sophisticated and detailed reporting capabilities to provide management with insight they needed to make the best possible business decisions. FCI was also attracted to the intuitive functionality and design of the solution, and impressed by the expertise and supportive approach demonstrated by SunGard staff.

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