We started with 40-45% lettering. Now we’re up to 70%, with peaks of 90-95%!
International Cookware, parent company of Pyrex and Duralex
International Cookware (sales 2021 120 million euros, 420 employees, some 30 people in foreign offices) is a holding company which essentially manages two brands well known to the French public: Pyrex and Duralex. It also has English, Spanish and Italian subsidiaries.
The accounting department at the Châteauroux head office handles all aspects of collection, credit control and reminders.
Albert Msihid, RAF, heads up the Collections unit. In a websession with Fanny Rondet, Sales Manager at DIMO Software, he talks about the agility issue he has had to face, and how the CashOnTime platform – deployed across subsidiaries and the main Pyrex company – has helped him boost performance.
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Time-consuming recording of cash receipts
Mr Msihid’s department (originally made up of 4 people) was using software running on IBM AS400, which lacked agility for cash receipts recording, dunning and accounts receivable monitoring.
Before CashOnTime was implemented, the Cash Receipts department processed :
- Collections every morning on receipt of bank statements for manual, line-by-line lettering of accounts receivable (almost 4 hours/day).
- Dunning and collection every afternoon.
- Each member of staff had an allocated portfolio, but was able to handle all incoming payments.
Major organizational constraints
According to Mr. Msihid, a flexible, cost-effective tool was needed to speed up the registration stage, while at the same time making the process more reliable and avoiding booking errors, given that no recruitment was possible. In addition, for the past 4 years, the department has been managing the GMS (Grande et Moyenne Surface) directly, a task previously outsourced. However, managing key accounts is a complex business: there may be one payer for 25 customer codes, or one customer alone may pay over 100 invoices, and so on. The daily time wasted on low value-added tasks was considerable.
“Every morning, we would pre-letter each collection to all our bank accounts. Depending on the volume, this represented around twenty collections a day. Some customers paid between 30 and 50 invoices. There’s also a seasonal pattern to the receipt of cash, with peaks particularly at the beginning and end of the month. We were also a little overwhelmed by managing the supermarket business.
The “CashOnTime Allocation” automatic lettering solution for cash receipts, a logical continuation
“We discovered CashOnTime Allocation when we were installing another solution for accounting entries. The time-consuming processes were preventing us from efficiently carrying out reminders procedures, carrying out analyses, and producing useful information for cash management. We go through a factor: the more we invoice, the more our customers pay us, the fewer deductions we have at factor level and the more cash we have”, explains Mr Msihid.
Maintaining good customer relations
Directly updated customer accounts avoid the need to double-check invoices for possible reminders. It also avoids tricky commercial problems, such as dunning a customer several times for several different invoices he may have paid. CashOnTime Allocation makes the information immediately available. The service also uses CashOnTime Collection for afternoon reminders. “We are up to date directly on incoming payments. Our reminders are in line with the customer’s account, which is itself up to date,” notes Mr. Msihid.
DIMO Software’s maxim: “Good lettering makes for good dunning, or good dunning makes for good lettering”. Indeed, it’s very tricky to dun a large customer for ten invoices when the morning’s collection hasn’t been recorded. There’s a snowball effect on the sales people the customer complains to later on. We’ve seen a marked improvement thanks to the freshness of the data,” says Msihid.
Deploying a receivables management solution: feedback and advice
The design phase
The initial design phase brings the customer and the service provider together to define the functional requirements, the business, the discrepancies encountered, how to manage them, define the degree of automation, identify specific rules, and so define how the interfaces are to be set up.
“There was a very detailed analysis of our accounting system, our working methods, our customer typologies, our different types of collections (documentary credits, advance payments, proforma, etc.). When we don’t yet have the invoice, we put it in NIP (non-lettable payment in the absence of an invoice). All these specificities have been integrated and several developments have been made accordingly. The quality of the DIMO Software experts’ listening and understanding was quite exceptional during this preliminary phase, which was crucial for putting the system into production”.
Mr. Msihid believes that DIMO Software’s in-depth experience in the preliminary phase is to be trusted: “They themselves have accumulated experience with their customers. They understood what we didn’t want to do anymore. We needed a system that was fast, reliable, and matched – only better – what we were doing before.
A base with specific features
“The development involved a combination of DIMO Software’s expertise, the functional expertise of the customer and its teams, and the technical expertise of the ERP accounting system. The CashOnTime platform does not involve any set-in-stone prerequisites.
A database is provided for file formats, and certain fields are mandatory. When DIMO Software retrieves the repository of pending invoices, a minimum of the document number, the attached customer and the amount are required. Customizable fields enable DIMO Software to store customer data useful for identifying the payer, the contact person to be recontacted, organizing CashOnTime Collection reports, and any other criteria enabling DIMO Software to perform automatic lettering”, explains Fanny Rondet.
If the customer has in-house expertise in ERP and accounting systems, DIMO Software experts will work with them to build the specifications. If the customer works with an integrator, the latter will be involved in the deployment project, as it will have to open certain information.
Measurable benefits
Pyrex first deployed CashOnTime Allocation, then CashOnTime Collection. Feedback on the platform covers a period of 8 to 18 months.
- Considerable time savings (65-70% automatic lettering, a saving of 1 FTE). “The Collection process normally takes 30 to 45 minutes. This reduces the stress of systematic line-by-line checking,” says Msihid. For the Allocation part, CashOnTime is self-enriched by the experience of previous letterings, thus increasing the lettering percentage. “We started at 40-45%. Now we’re up to 70%, with peaks of 90-95%”.
- System reliability thanks to up-to-date customer account data, enabling high-quality, regular reminders in real time
- Real-time KPIs (aged trial balance, DSO tracking, etc.). “We can send the aged trial balance to the customer invoice by invoice. Previously, we processed an aged trial balance manually, extracting data from the system. We had to sort, create filters and then send it to each customer. Now, the aged trial balance is extracted directly from the system, customer by customer, invoice by invoice. On request, we can send an invoice, an account statement, etc. automatically and directly. No time is wasted.
- System scalability: SaaS mode and regular automatic updates mean you don’t have to worry about logistics.
- DIMO Software’s extensive support and maximum responsiveness mean that the tool is constantly evolving.
Customer item management: the quality of incoming information guarantees system reliability
The automatic lettering rate depends on a number of factors: the data stored in the files retrieved by CashOnTime (account statements), whether or not customer slips or payment advices are processed, and whether or not additional information can be deployed.
The level of automation authorized by the customer is crucial: CashOnTime Allocation is designed to letter up to 100% of cases… but it’s not magic! Without information, without data, without history, it cannot function optimally. So it stops at the limits set by the customer. For Fanny Rondet: “For example, you can set the system to automatically bill up to ‘n’ invoices for the same amount on the oldest due date. We can also automatically pass centime differences with a given tolerance threshold. If the software has the slightest doubt, it does not perform automatic lettering. It doesn’t stop, however, because it makes proposals to the user, who arbitrates on the basis of confidence indices. This saves time in the rest of the process”.
With CashOnTime Collection, the customer builds reminder strategies. Automatic lettering is launched when invoices are imported in the morning and account statements are received. The data is pushed into the ERP, CashOnTime Collection is refreshed and the reminder strategy (e-mail, mail, actions) is launched. The collection manager can define a specific start time for dunning, to preserve time for filing certain dunning notices, removing others, etc., thus guaranteeing the closest possible reliability of the information.
Maintain process control
“We always remain in control of lettering, or dunning. We’ve set up a pre-reminder system that lets customers know that in a few hours or days, they’ll receive a statement for payment. This eliminates the need to resend invoices,” explains Msihid. Many CashOnTime customers set up this reminder scenario to push information, for example, once a month via the billing statement. In terms of processing volume, CashOnTime’s biggest customer processes over 1 million customer files. The largest customer in terms of daily collections is over 15,000. Pyrex manages 450 active recurring customers with basic invoices, bearing in mind that the company only sells to wholesalers or large retailers. In total, the company has between 800 and 1,000 core customers.
A word about follow-up actions between debt collectors and sales representatives
CashOnTime helps develop a “cash culture” by enabling sales staff to connect in real time. Their degree of involvement in the cash-input chain differs from one profile to another: one sales rep, for example, logs on to the customer file to find out about the latest reminder actions before an appointment. Some entities do not provide access to the platform. On the other hand, they will call on sales representatives to resolve disputes. “When the collection manager creates a dispute (billing error on an item), the sales rep is informed by e-mail in the pre-defined validation workflow. With one click, he or she is directed to the CashOnTime dispute page, where he or she can comment on, approve or reject the customer’s dispute, and attach documents. In this case, the sales rep is a collaborator in the dispute resolution process,” explains Fanny Rondet.
CashOnTime Collection features a “chatter”, a discussion forum where users can ask questions in real time. This takes users away from messaging and widens the scope of information. In the absence of a sales representative, an employee can consult a historical discussion. In the absence of a collection manager, portfolios can be reassigned. On the other hand, a sales manager can monitor his or her teams via a welcome dashboard, and view outstanding amounts on the various portfolios, customer payment times and KPI extractions (disputes by reason, visualization of outstanding vs. sales, etc.).
Boost performance monitoring
The “Piloting” menu in Allocation allows you to monitor lettering performance in its various phases: what it brings in terms of numbers, percentages and amounts. There’s also a breakdown of cash receipts by company, bank account, currency, etc. Variances and internal processes between subsidiaries can be identified.
Finally, we can retrieve customer contractual commitments in the interfaces. “This is the basis on which we produce the cash collection forecast ratio, the cash inflow between contractual commitments vs. observed payment habits. These customer commitments are retrieved in the form of information stored in fields via the interfaces set up between the various ERP systems and CashOnTime,” concludes Fanny Rondet.
