Published: January 02, 2008
When I first joined Future Electronics 15 years ago, we had systems in place for collections but with business growth of 25-30% and little automation, these were inadequate for our needs. The result was that we just added more and more people to deal with the expanded business, rather than developing new, more efficient business processes. At that time, the industry association NEDCA (National Electronics Distribution Credit Association) invited providers of technology and other services to come and present to us. The GETPAID Corporation (which was acquired by SunGard and is part of the SunGard AvantGard Receivables solution) came to one of these meetings and the solution seemed to provide us with the tools we needed to implement the efficient processes we were looking for. Consequently, we conducted an evaluation of similar companies over a period of about a year.
During this process, it became apparent from the combination of system approach and functionality, together with the expertise of the GETPAID team, that it was the right solution for us, and we implemented it 10 or 11 years ago. Initially, we implemented the solution to manage our United States collections. Although as an early customer we had some difficulties during the implementation, we saw immediate results. We then rolled out the solution to Asia and Europe five or six years ago.
Since we have used the solution for a long time, we have developed significant product experience and users are very familiar with it. Consequently, we have been in a position to drive product direction with the supplier - we have pushed them quite hard at times but we have a very strong relationship and we are very satisfied with both the product and the level of service which we have received. Over this time, we seem to have developed a reputation for our collections management approach, to the extent that other suppliers have offered to give us their solutions for free if we will switch products!
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As we are privately held, we don’t necessarily need to demonstrate specific return on investment to justify every decision to the same degree as other companies. However, we had clear objectives when implementing sophisticated collections management software which we have been able to satisfy, and we have delivered substantial improvements both in quantifiable metrics such as DSO (days sales outstanding) and in achieving the operational efficiencies which were vitally important to us. There have been other outcomes too: for example, we renegotiated our credit insurance agreement and reduced the cost to the company by 30% as the insurance company had greater confidence in the way in which we manage our collections.
We have a secure website where customers can retrieve their invoices and statements.
Most credit and collection departments have responsibility for a single region, such as the United States. As a result of implementing AvantGard GETPAID, we have a somewhat unusual structure in that we have global rather than regional responsibility. This creates a differentiator as a business as we have the same business processes and access to information across the whole company. This has a variety of benefits, primarily as many of our clients are also global businesses.
This means we make global credit decisions but just as importantly, we can make one call to a customer for all collections worldwide, rather than individuals calling about specific invoices. This improves our operational efficiency but also presents a more professional, streamlined service which is important in ensuring that we deliver consistently excellent services. Operating globally inevitably has some challenges and we need to make sure that we recognize and observe cultural sensitivities as well as local languages. For example, approvals, payment demands and credits all need to be undertaken in a way which is appropriate to each country. We have managed this by implementing common, automated processes, but with regional variations.
As well as providing more tailored customer services and more rapid credit decisions, we have implemented other facilities which we hope add to the reasons why customers continue to do business with Future Electronics. For example, we have a secure website where customers can retrieve their invoices and statements. We can encourage prompt payment by sending out statements in advance of payment, all of which is automated in AvantGard GETPAID.
In the future, our primary aim is to continue providing excellent service to our customers and maximizing available cash for the business. There are potentially areas in which the department may take a greater role, such as financial analysis, customer service and returns. The business landscape in which we operate is becoming increasingly international and our customers fully expect us to provide a global service, such as extending the same payment terms across regions. This will be exacerbated further as the trend towards offshoring continues. We anticipate an expanded sales force with responsibility for a customer across all their activities and across all regions, which is important from both a credit and customer relationship point of view.
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