Adopting a Strategy – Driven Approach to Credit & Collections

Konica Minolta is known for the precision and quality of its technology, and this attention to detail is apparent throughout the group. One example of this was the recent project to transform the credit and collections function in Europe by implementing innovative software and best-in-class processes and controls to optimise cash and risk management, and provide the scalability and flexibility to support future growth. As a result, Konica Minolta was awarded the TMI Corporate Recognition Award 2016 for Credit & Collections.

Business challenges

Before implementing a new solution, we were managing our collection processes manually, with each collector extracting account information from our ERP and managing collections in spreadsheets. As this was very time-consuming, we concentrated our attentions only on the largest outstanding amounts, so our days sales outstanding (DSO) was high and cash flow was unpredictable. We also lacked oversight of all customer overdues, restricting our ability to monitor and manage cash flow and risk effectively.

 
Embarking on a transformation project

To resolve these challenges, and create a more flexible, scalable and efficient credit and collection organisation, we made the decision to transform our credit and collections processes by implementing a new technology solution. Our aim was to substantially reduce our outstanding debts and DSO, and manage credit risk more effectively. We embarked on a thorough selection process and ultimately faced the decision of whether to extend the use of our existing ERP to credit and collections, or implement FIS’ GETPAID solution.

Ultimately, we opted for GETPAID for a variety of reasons. We were very satisfied with FIS’ credibility and expertise in credit and collections, and the solution had an established track record with other comparable organisations. In particular, GETPAID offered particular flexibility to meet the needs of collection teams across our business. For example, we have organised our business in clusters, each of which has a national operating company (NOC). Our cluster, Cluster West, is made up of Belgium, Netherlands, Austria and Germany, but we also incorporated the UK in our project which has a larger NOC. We have different collection strategies, languages and business culture in each country within the cluster, as well as requiring visibility across each cluster, so GETPAID’s ability to support this flexibility was very important. 

A disciplined implementation

We started the project with a variety of workshops involving the ultimate users of the system to understand existing processes and how these could be optimised through GETPAID. This led to the development of a project blueprint which formed the basis for a test phase conducted by the NOC, followed by user acceptance testing and ‘go live’. This was followed by a post-live period when we brought people on to the new system. The project was supported and monitored by a project manager and consultant from FIS throughout, in addition to a Konica Minolta project manager with support from the business.

Collections in practice

We now segment our customer base, according to factors such as risk grade, geography or balance due, and apply different collection strategies using GETPAID’s strategic rules engine. This allows us to configure different courses of action with specific events triggered automatically as an invoice ages. Each strategy can consist of an unlimited number of steps, according to the previous contact activity. For example, we can now send correspondence automatically to remind customers that their invoices are coming due. This is a step we did not have in our previous process, so although it took time for customers to become accustomed to it, it has helped us to deliver better customer service by ensuring that we had a common view of the account status and resolving disputes quickly.

[[[PAGE]]]

GETPAID also presents work queues to each collector to help them identify on one screen who they need to contact each day. Collectors can also quickly view information such as payment history, proof-of-delivery documents, ageing, and cash applied, and enter notes, create payment plans, mark promises to pay, match credits, generate disputes, send invoice copies and correspondence such as confirmations directly through a single screen. We can also record and monitor reasons for non-payment, such as disputes, lack of cash flow etc. so we can offer better reporting to internal customers.

Project outcomes

As a result of implementing GETPAID, we have transformed our credit and collections processes, analysis and reporting to a proactive, strategically-led organisation. We are now able to focus on collections of all sizes, rather than just ‘low hanging fruit’ which has improved our cash flow and DSO considerably. The collection process is far more efficient, and with far greater automation, the experience of collectors has been significantly improved, and we have been able to reallocate resources from our credit team to more strategic tasks. Having implementing GETPAID, we reduced our past dues from €1.7m to €300k within a couple of months. Since then, our performance has stabilised, and we have a DSO of around 30 days, which reflects our typical payment terms. We also have far greater visibility over cash and risk across the organisation, both across each cluster and down to individual country, collector and account level. We are now rolling out the use of GETPAID to collection teams in Austria, UK and France. France will be a new project as the requirements and collection strategies differ from those in our existing project scope.

Based on our experience, it is essential to get the business – by which I mean future users – involved as early as possible, as they have the best insight into what the system should offer and how it should be configured. This was particularly helpful to our NOCs in delivering a best-in-class project that met our organisational needs, but also meant that we had greater engagement and motivation amongst our users. Equally important is the need to communicate clearly and regularly, to ensure that all internal stakeholders across sales, services, marketing etc. are fully appraised of what we were trying to achieve, how they would be affected and the value to Konica Minolta.