This is the sequel to a discussion shared by Olivier Magnon-Pujo, Finance and Administration Director at Grant Thornton, and Laurent Gottafrey, Sales Administration Director at Ayming France, on best practices for optimizing cash flow and shortening payment times.
What was in the first part:
- What impact has the crisis had on companies’ payment behaviour?
- What are the new habits to adopt to better recover cash?
- How to prepare and secure a recovery plan?
If you missed it, here it is: PART 1
In this article:
- What triggers the search for an efficient solution?
- Criteria for choosing a solution
- Implementation approach: organization, duration, etc.
- Results and key success factors
Triggering effects in the search for an efficient solution
Organizations are already managing multiple IT projects. Why should collections become a priority? Laurent Gottafrey cites 3 reasons for implementing CashOnTime:
- The choice of a tool was part of a strategic cashflow optimization project. It was a facilitating component that would enable us to anticipate, prevent, cure and complete collection processes.
- ROI in the broadest sense of the term came into play, i.e. the balance between direct financial costs, indirect costs and human costs, versus gains. We have to ask ourselves the right questions: will the implementation of the tool enable us to benefit from accelerated cash flow and productivity gains? Will the customer always remain at the heart of our strategy? Will customer relations be affected?
- Ayming wanted to homogenize processing schedules across all the countries in which it operates, while adapting to local specificities. For the same risks, the same qualifications of objections were needed to trigger the necessary actions and adapt the provisioning policy.
What are the selection criteria?
Olivier Magnon-Pujo wanted to give collections the means to track their actions via a tool that was simple enough to be easily taken over locally by the teams in the various offices. “These days, there are too many tools in the company. Each department thinks that its own is necessarily the most efficient. However, there’s a contradiction between entrusting a technical solution to as many people as possible and trying to get the most out of it. We had a satisfactory technical solution, but it was under-utilized. We reorganized by centralizing collection and making the tool operational. CashOnTime is now widely and fully used on a daily basis, and gives us the utmost satisfaction“.
As far as Ayming is concerned, import data from 15 countries does not necessarily come from the same sources. CashOnTime was implemented in the UK in the middle of a lockdown, followed by Canada, the USA, France and Belgium. Other subsidiaries will follow in due course.
Advice on implementation (organization, duration, etc.)
Valérie Konarksi believes that the projects are simple and quick to implement: from 1 to 3 months from start-up to “go live”. CashOnTime aims to empower customers, who can vary their dunning strategies, reconciliation criteria, template templates… Ideally, the organization can start with a limited scope, to quickly gain ROI and get teams on board. However, care must be taken: “the tool is empty at launch, and will be fed by the ERP. It needs quality, available data“.
Laurent Gottafrey adds that, in terms of buy-in, reconciling cash collection and customer relations is essential. The project must be supported by management and followed up with training, as the ripple effect also plays a role in change management. CashOnTime’s reports provide a global view of all countries using the solution, enabling local identification of non-conformities or objections to purchase orders, for example, and enabling improvements to be made or remedial action to be taken on certain disputes.
Results and key success factors
Laurent Gottafrey estimates DSO gains of around twenty days (an even better result than that obtained for Visiativ). Another significant point is that the cash culture is now well established among the organization’s employees. “As we emerge from the crisis, the recovery time will be critical. In spite of this, good practices have been put in place, such as the dematerialization of invoices, which has become almost a matter of course.
For Grant Thornton: 8 days saved (2×4 days on production work-in-progress and collection work-in-progress) in 2020 on overall cash flow, from time production to collection. Targets have been set and broken down by office, department and associate, and Olivier Magnon-Pujo believes that the organization will be able to aim even higher in terms of cash gains.
In short: the quest for cash requires a rigorous strategy built around the organization of a department and upstream processes, before implementing downstream actions via dedicated tools.
In conclusion, we could say that both Ayming and Grant Thornton were able to use all the recovery levers at their disposal to achieve the objectives they had each set themselves.
CashOnTime, a complete solution!
CashOnTime integrates a library of customizable reports, from the classic aged trial balance to the finest KPI. The solution can, for example, report on the weight of a salesperson in relation to sales and payment times. The solution is connected to all ERP systems on the market. If several ERP systems coexist within a group, CashOnTime is able to communicate with each of them.
CashOnTime constitutes a single repository from which the organization will have a global view of the outstanding amounts of all its customers. No special set-up is required to prepare the user workstation, and all that’s needed is Internet access for working in the home office, or from the office…
The application is accessible at any time and to as many people as possible, thanks to SaaS, which means no infrastructure is required. The end of Post-it notes!
