Cash & Liquidity Management

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Optimising Collections at PT Indomobil Collecting cash on time is critical to every organisation. There are various elements in achieving this, from ensuring that it is as convenient as possible for customers to pay, through to efficient reconciliation, cash visibility and debt collection capabilities. Firms working predominantly in the business-to-business space, with lower volumes of collections and customers with structured accounts payable processes, tend to find collections easier. For retail companies with many thousands of individual customers, the experience can be very different.

Optimising Collections at PT Indomobil

An Interview with Jusak Kertowidjojo, President Director, PT Indomobil Finance Indonesia

Collecting cash on time is critical to every organisation. There are various elements in achieving this, from ensuring that it is as convenient as possible for customers to pay, through to efficient reconciliation, cash visibility and debt collection capabilities. Firms working predominantly in the business-to-business space, with lower volumes of collections and customers with structured accounts payable processes, tend to find collections easier. For retail companies with many thousands of individual customers, the experience can be very different. However, by implementing the greatest possible customer convenience, efficiency and cash flow visibility, companies operating in the retail space can deliver significant working capital improvements, reduce bad debts and improve margins. This in turn enables cost savings to be passed on to customers, creating competitive advantage.

IMFI made the decision to appoint HSBC Global Payments and Cash Management as a partner, and have implemented HSBC’s Integrated Receivables Solutions to extend collection channels using the ATM Bersama network with more than 13,000 ATMs across Indonesia. This greatly enhances convenience and payment flexibility for IMFI’s customers. The solution allows IMFI to have full visibility across its cash positions, including the ability to identify incoming payments on a real-time basis. Additionally, the company’s collections and receivables will be further streamlined, while improving its overall working capital management. The solution also allows all banking activities to be consolidated with HSBC via the Bank’s internet-based electronic banking platform, HSBCnet, integrating with IMFI’s back office system.

In this interview, Helen Sanders, Editor, talks to Jusak Kertowidjojo, President Director, PT Indomobil Finance Indonesia (IMFI), one of the foremost multi-financing companies in Indonesia’s car and motorcycle sector, about how the company has enhanced its collections processes.

Please could you describe briefly IMFI’s business model

IMFI was established in 1993 as the finance company in consumer vehicle financing, leasing and factoring with 191 branches, representatives and outlets across Indonesia. In consumer financing, we currently have about 300,000 customers spread across the Indonesian islands, the majority of whom are owners of 2-wheeled vehicles. Most consumers finance their vehicle purchases across a term of between 25 and 36 months. In 2008, our average monthly collection was IDR160bn.

What systems do you use internally to manage collections?

IMFI has developed an integrated in-house system across the collections process, from creating purchase orders to accounting for collections. We also use the system to monitor and manage our receivables aging. An important feature of the integrated in-house system we have implemented is its online capability, connecting our main branches around Indonesia to provide accurate and up-to-date information on collections and customer data 24 hours a day for both head office and all of our branches.

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