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How Systems Maintenance Services Collected More Than They Invoiced in 2012 with Anytime Collect

James Mallory, Director of Marketinge2b teknologies

Henry Ijams, Managing DirectorPaystream Advisors

http://www.e2btek.com/


About PayStream Advisors

PayStream Advisors is a provider of independent research and automation assessments for financial automation technology to business leaders in finance and procurement.

Advisory ServicesPayStream Research


Henry IjamsManaging DirectorPayStream Advisors

Henry‘s 28 years of experience focuses on trends and technologies in financial operations automation including strategies regarding the automation and benchmarking of Purchasing, Payables and Account Receivables processes. Through PayStream Advisors, Mr. Ijams consults with domestic and international organizations that want to take advantage of leading practices and automation solutions.

Presented by:


The Accounts Receivable Crisis

Only 26% of businesses have automated some portion of their accounts receivable collections.

(Source: Credit Research Foundation 2011)


Collector Time Allocation


The Promise of RCM Automation

The promise of RCM software is dramatic improvement in receivables performance. Using collection automation alone, many companies have seen

reductions of:

10 to 20 percent in DSO25 percent in past due receivables15 to 25 percent in bad debt reserves


SaaS Impact on RCM

“With the advent of Software-As-A-Service (SaaS) and Cloud computing, scale has become less of an issue thereby allowing smaller organizations to justify automation”

(Source: Paystream RCM Report 2013)

Anytime Collect is one of the ONLY RCM applications available in a SaaS delivery model for smaller companies on Intuit QuickBooks, Sage 50 US (Peachtree), and mid-market ERP applications


Anytime Collect Overview

• Cloud-Deployed Client (Microsoft Click-Once)• Microsoft SQL (premise) or Microsoft SQL Azure (hosted)• Pricing starts at just $89/month/user

Anytime Collect web portal for credit and sales reps.


Systems Maintenance Services

32 Years In Business (Founded 1981)

600 Employees

90 Global Service Centers

3,100 Enterprise Customers

99.7 Customer Retention Rate

60 % of Dow Jones Customers

www.sysmaint.com



• 4 collectors in 3 states • Sage 500 ERP – no collections functionality• Decentralized systems & spreadsheets• No management reports• 2,000+ customers • 3,000 invoices monthly

ERP vendors lack the narrow focus necessary to address all the variations and unique situations that affect trade receivables management.

(Paystream Advisors 2013)



• Complex contract invoices spanning months to multiple years.

• Invoice detail can be tens of thousands of lines long per invoice.

• Decentralized T&M invoice environment with hundreds of Engineers throughout the US all with the ability to coordinate their own T&M invoice.

• Decentralized collections group with varied process background and understanding of our invoices.



Difficulty in coordinating between multiple collection agents

I’ve contacted the customers on my Excel list…now what?

• Potential for inconsistency when contacting the customer.

• 2 collections personnel contacting the same customer over and over.

• Difficulty reviewing history and escalations.

• Difficulty managing personnel and work loads. No real tracking available.

• 3 month DSO at 67 days.


Goals & Strategies

Goals:

• Implement a measurable collection methodology

• Have a better process than Excel lists or alphabetic customer lists

• Escalation tracking with readily available history

• Not “digging through emails” to understand history and escalations

• Obtain payment within 30-60 days.

• Target DSO of 55 by the end of 2012.


The Accounts Receivable Crisis

Paystream Summary• Most companies have not automated credit and A/R operations• ERP Software = Limited RCM Features• Companies continue to invest time and money into administrative

tasks that should be automated with RCM applications• A/R Automation is most common in larger organizations yet

smaller organizations stand the most to lose without it

Systems Maintenance Services• Did not have automated credit or A/R operations prior to 2012• ERP system offered only basic customer notes, aging report, and

no automation or workflow


Credit & Collections Challenges

• Too little collection activity• Erratic collection efforts• High adjustment volumes• Inconsistent credit assessments• Fragmented information• Inadequate reporting• A difficult economy

(Source: Paystream RCM Report 2013)

Anytime Collect helps Systems Maintenance Services balance collector work queues and centralizes information with consistent activities built on best in class alerts and workflow


Focus on Key Accounts

Fundamental challenges vary by company, but can be roughly

defined by Pareto’s Law, which states that 80 percent of

revenues come from 20 percent of customers.

Anytime Collect helped Systems Maintenance Services to contact EVERY late customer through each phase of their collections efforts. This allowed them adequate time to focus on strategic accounts and risky accounts that required more effort


RCM Value Proposition

According to Paystream’s 2013 RCM Report – there are three primary value propositions for RCM application. Systems Maintenance Services realized results in all three of these areas:

•Processing Efficiency• Lower Costs• Enhanced Visibility & Control


B2B Collections Management

“The key innovation of business-to-business (B2B) collection software is

workflow automation. A strategy engine integrates the AR

data with a tickler system and activity logs, so account status and previous

actions taken can drive the next logical collection step. Moreover, the

software can prioritize collection activities, ensuring a

consistent and efficient process. Integrated communication tools – faxing

capabilities, e-mail, invoice reprinting, other forms of data export, and

auto-dialers – further enhance productivity. “(Source: Paystream Advisors 2013)


SMS Workflow & Strategy Engine

• 1 Person Contacting Every Customer Account• Send Statements & Invoices• Resolve Simple Disputes• Very High Ticket Volume

Level 1


Anytime Collect Workflow & Rules Engine

• Build workflow and rules based on:o Account Informationo Invoice Informationo Workflow by Account Credit Class

• Examples:o Account approaching credit limito Account ADP over 45 Dayso Invoices 1-3 Days Past Dueo Invoices 5 Days Past Dueo Invoices 30 Days Past Dueo Invoice Due in 3 Days w/ no paymento Invoices Factoredo Invoices Sent to 3P Collections

Anytime Collect Rules & Alerts


CRM vs. RCM

RCM is like CRM – Document what you’ve done

CRM is NOT like RCM – Cannot tell you what you need to do


Processing Efficiency – SMS Results

• Invoices are all in PDF and readily selectable in e2b• Statements generated on the fly• Emails sent and received from the software• Automated communications based on rules• Account reassignment based on Collections Level• CRM-like capabilities to document calls, email, and all

other activities.• Working from one system


Lower Costs – SMS Results

• Significant reductions in labor related to collections within the first six months of using Anytime Collect• Reallocation of 50% of one credit manager’s time to other, more

critical activities • Significant reduction in outstanding A/R• Increased cash flow• Shorten the sale-to-cash cycle time • DSO at 49 days (6 points below targeted goals)• Excluding 2 most difficult customers, DSO is at 40 days


Enhanced Visibility & Control – SMS Results

• Notes and attachments all in one place• History for escalation readily available• Advantages gained for history and auditing• Collection activities are measurable• Using the software to drive measurable and desired results• Customer AP contacts readily available• Instant access to current account aging, invoices, and payment history • Insight available “to act, instead of react to outstanding accounts.”• Equal and measurable work load between the collections personnel• Internal audit…we are prepared• Because of the simplistic presentation capabilities of the software, we will

soon be publishing AR information into an intranet site to Sales


SMS Results By The Numbers

67 Original DSO Before Anytime Collect

49 New DSO After Anytime Collect

40 DSO After Anytime Collect (Excluding 2 Difficult Accounts)

40 Percent Reduction in DSO (Excluding 2 Difficult Accounts)

27 Days Cash Is In Bank & Not In A/R (Excluding 2 Difficult Accounts)

Paystream: Companies implementing systems like Anytime Collect realize an average of 10% to 20% reduction in DSO. Systems Maintenance Services reduced DSO by a whopping 27% (All Accounts) and 40% (All But 2 Accounts)!


The Big Result

Systems Maintenance Services Collected More Money in 2012 Than They Invoiced!

They did this by:

• Establishing processes and policies • Leveraging Anytime Collect as the backbone for their system• Reducing their outstanding A/R for services billed in 2012 • Collecting on a significant backlog of A/R from previous years


Questions

Henry Ijamswww.paystreamadvisors.com

James Mallory440.352.4700 x 229

[email protected]