Lettering has improved, omissions have been reduced, and employees are able to add real value to their jobs.
With accounts receivable accounting for around 40% of a company’s balance sheet assets, it represents a major lever for optimizing working capital. At a time when cash management and cash generation are the main challenges facing companies, the CHOPARD Group offers advice on how to significantly improve accounts receivable management. Emilie Talas, head of the Accounting division, and Lucas Stéphanie, head of the Chopard Group’s Treasury division, answer three key questions: What processes should be put in place to free up cash? What are the measurable benefits? What are the points to watch out for? A workshop led by Fanny RONDET (CashOnTime sales manager) during FORUMDIMO 2023.
The context: the Group is undergoing continuous external growth
The Chopard group, founded in 1958 and based in Besançon (2,500 employees, over 100 outlets, sales of €1.5 billion), is a major player in vehicle distribution in France. It has acquired a large number of companies, including Stellantis (Peugeot and Citroën brands), Mercedes and Aston Martin. It’s against this backdrop that the accounting department must quickly produce accurate figures and results. Each time a new dealership is acquired, the accounting department is systematically centralized at the head office in Biel, around four departments: Treasury, Suppliers, Manufacturers and Customers. Each employee manages a portfolio of companies, with very precise tasks. The accounting managers are in charge of reviewing the dossiers in their entirety, issuing tax returns, managing tax audits and then reporting results to the brands on a monthly or quarterly basis.
CashOnTime: the solution for day-to-day receivables management
The treasury department is responsible for entering customer receipts, while the customer department is in charge of monitoring customer accounts and payment reminders. This department is dedicated to entering and lettering customer receipts, and uses CashOnTime Allocation on a daily basis. CashOnTime Collection is linked to the customer service department for accounts receivable monitoring and payment reminders. On average, 17 people use CashOnTime Allocation, including two administrators and fourteen autonomous daily users. At the same time, a dozen employees use CashOnTime Collection and around 200 users.
Debt collection as a starting point for reflection
Emilie Talas recounts that, given the group’s rapid growth, it was necessary to find a single solution for centralizing customer information: “We needed to be able to communicate, since exchanging Excel files with notes and pivot tables had shown its limitations. We needed to structure the work of the dozen or so customer service staff”. The job of the debt collector is not a simple one: looking at the KPIs and associated risks, which account should be followed up first? Diary management has proved to be very structuring for employees. Now, thanks to all the dunning strategies in place, they can see at a glance at any time the steps taken (customer call, formal notice, dunning, etc.).
An ergonomic solution for fast access to information
Some sixty dealerships in the group represent around one hundred sales outlets. CashOnTime Allocation ensures that customer accounts are up to date, as quickly as possible. “If we’re not responsive enough, receivables age, and the older they get, the harder it is to contact the customer. The platform is a real central source of information. Good collection depends on good lettering, so that we have up-to-date data and a very precise view. We have around 15,000 open customers with outstandings. We had to be able to add concessions using a robust tool. What’s more, the tool had to be sufficiently flexible to adapt to rapid external growth, i.e. be able to manage an evolving customer base”.
Smooth implementation of CashOnTime Collection
In the space of two months, a relatively short analysis (less than a week) was carried out, followed by production start-up a month later. “At the time, we had at least 25 dealerships. We deployed them all at the same time. As administrators of the solution, we’re fairly autonomous. The process is quite simple: once we buy a dealership, the internal administrators add it to the imports,” explains Emilie Talas.
A preliminary analysis of customer typologies is highly recommended.
A single type of customer, such as an individual, is easy to manage. On the other hand, if you have to manage companies, Emilie Talas advises you to take careful note of all types of customer, to be sure of developing the right payment reminder strategies, and to adapt your reminder templates from the outset to the type of customer you want to remind. “You don’t dun rental companies the same way you dun private individuals”. Fanny Rondet adds: “It’s the ‘cocooning’ effect: just because you have an automatic dunning tool doesn’t mean you can’t choose the best way to address your customers, depending on their specific needs”.
Fanny Rondet explains DIMO Software’s approach: “The CashOnTime platform is integrated into the company’s IS. Upstream, it is important to carefully analyze the interfaces and to ensure that, when the project is deployed, the accounting department can count on the availability of its teams, because DIMO Software will adapt to what the company can provide in the pre-sales phase. During the design and analysis workshops, there is a very functional part (business cases, KPIs, etc.) and a more technical part based on the collection of functional data. We need certain files to co-construct effective strategies”.
Visualization of work-in-progress, a major benefit for optimizing accounts receivable
Emilie Talas believes that the tool has proved highly structuring for the team: “Everyone knows where to start as soon as they arrive in the company in the morning. This is important in view of the volumes to be processed, particularly automatic tasks, since we have daily reminder proposals. The diary is therefore very reassuring for newcomers to the company or those new to IT. The use of KPIs provides visibility on outstanding debts and aging receivables, with details by customer. In addition to debt collection, the dealerships have a real role to play, by appropriating this “cash culture”, to recover the money from each sale”.
CashOnTime Allocation: a lettering tool to unify processes
For Lucas Stéphanie, the Group’s rapid external growth meant that we had to find a solution to keep our customer balances as clean as possible and, by extension, our customer follow-up as efficient as possible. The relationship between the treasury department and the customer department is very close. Data entry and lettering must be as reliable as possible, so that the customer department can use CashOnTime Collection to follow up efficiently.
Another issue: the DMS (dealers) of the Stellantis part were hosted on a particular accounting software and the Mercedes part on another software. Processes varied depending on the accounting software. CashOnTime Allocation has made it possible to standardize everything, since the tool is now used by everyone. “We speak the same language, whether on the Mercedes side or the Stellantis side, which has been crucial in creating team cohesion.
A lettering lens for time-saving autonomy
Lucas Stéphanie was aiming for 60% of entries to be made by the software. According to him: “The more the software processes automatically, the less time-consuming manual processing will be. Fanny Rondet adds: “On the customer collection side, with CashOnTime Allocation, the Chopard Group processes just over 220,000 collections per year on the platform. This compares with 100% manual processing before the application was deployed. The choice of CashOnTime Allocation was facilitated by the fact that CashOnTime Collection was already in place, implemented by a recognized service provider, and that significant time savings had been noted.
The application also offers a high degree of autonomy. After training from DIMO Software, Chopard’s administrators were able to manage redemptions and changes themselves. Internally, the Treasury department was using GEC Connect to process recurring items (bank charges and some supplier direct debits). CashOnTime Allocation retains the elements of GEC Connect, while adding customer management: “The first model on some of the most complicated dealerships enabled us to achieve a 50% automatic lettering rate. We then fine-tuned our settings, and the goal was very quickly achieved by dealing with special cases”. Fanny Rondet explains: “To produce this model, DIMO Software retrieves a week’s worth of account statements without any parameters being set in the application, then integrates the data into the standard strategy, without any learning process, Artificial Intelligence or definition of specific rules”.
Deployment in two months
The same lead times as for CashOnTime Collection were applied, i.e. around two months once the database was ready. “We were careful to identify areas for improvement, so as to set up as many customer transfers as possible. As the administrators were autonomous in managing the software, they were able to train the treasury team on part of the software and make them operational in their turn,” explains Lucas Stéphanie.
CashOnTime is not “magic”: beware of special cases!
Lucas Stéphanie admits that there are bound to be a few complicated customers to set up in the software. For example, some insurance companies send us transfers that include commissions and VAT. How can we automate these transfers? DIMO Software therefore set up special parameters to distinguish between the processing of amounts corresponding to insurance transfers, commissions and VAT. We know that there’s a small difference between the invoice amount and the transfer amount. By clicking on the “Insurance” button, the tool will automatically calculate the amount of the charge and the VAT.But sometimes, it’s better not to take the risk of automatically processing the case, especially when these customers represent only 2% of our customer transfers that can’t go through the software”.
Fanny Rondet admits: “In the tool, there is the automated part (the famous “over 80%”). And then DIMO Software supports users on the remaining work to be done, on the discrepancies encountered (supplier compensation, interest on arrears, down payments, proformas, etc.). The team will set up a “button” with the right accounting scheme, the right wording, the right information so that, with one click, the tool can send the right information to the organization’s accounting system and support employees on the remaining work to be done”.
Customer relationship management tools: a definite impact on the human factor
According to Lucas Stéphanie: “Before the tool was introduced, the people in my division were seen more as data entry agents. Since then, the tool has made the task more attractive: we do more analysis, we check that we’re charging the right customer account and sorting the right invoices. Accountants are more autonomous and have a major impact on customer balances: they are the first to receive transfers, and their ability to analyze them via the tool has a crucial impact on customer accounts”.
The 60% lettering target was quickly achieved within six months: “We’re now up to 75-80% automatic data entry. The time saved is enormous and represents the saving of one FTE. For large payers, we have three dealerships in the group that are mainly dedicated to PR (spare parts), with a fairly high volume of after-sales invoices. For these dealerships, we generally received around ten monthly transfers, with between 600 and 900 invoices per transfer. Whereas it used to take an employee 2 to 2.5 days to enter these transfers, it now only takes half a day for all the transfers. Lettering has improved, oversights have been reduced, and employees have gained real added value in their jobs. To sum up: securing the flow of funds has led to improved collection.”
