Published: October 01, 2008
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.
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.
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. [[[PAGE]]]
By working closely with SunGard, FCI implemented the new solution, including improved, integrated business processes and reporting, on time and within budget. So far, the project has encompassed collections, dispute resolution and management reporting. Initially, AvantGard Receivables was implemented in two locations but following a successful implementation, the solution is being expanded across the company’s global credit and collections operations. In particular, the solution has proved a close fit with the company’s business requirements.
There have already been considerable benefits resulting from the implementation of the system. The company’s most important areas of concern, namely lowering DSO and improving reporting, have been significantly enhanced. Furthermore, by making operational improvements, FCI has unlocked cash that was formerly tied up in covering overdue payments.
The company has also experienced material cost savings resulting from enhanced reporting, which now provides management with an accurate snapshot of essential credit and collections data at any point in time.
As a result of implementing enhanced business processes and reporting through new technology, FCI has been able to reduce its DSO by five days and unlock cash that was previously tied up in covering overdue payments. Past due accounts receivables have already been reduced by between 8% and 20% in different locations and by improving process automation and workflow, productivity has been significantly increased. By increasing visibility across the operation, management decisions can be made more effectively and forecasting conducted more accurately.
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