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In Focus Commercial Credit


Using master data in accounts- receivable management


Having access to, and making the best use of, data metrics is the key to developing a successful credit strategy


Bodil Sandvik Head of credit management, Nordic Choice Hotels Bodil.Sandvik@choice.no


Master data management (MDM) is a comprehensive method of enabling an enterprise to link all of its critical data to one file, called a master file, which provides a common point of reference. We will tell you how we dramatically


increased cashflow from account receivables based on changing the tools and the processes according to customer data.


Analysing overdue accounts We found that our customers were paying later than the agreed payment terms. So why did customers refuse to pay? Was poor credit the only reason? We can all agree that knowing your


customer is key to further enhancing their experience of your service, and to expanding your business in a safe manner. The same thing goes for diminishing your outstanding receivables, and preventing more bad customers from getting credit that you do not want to give out. There are several ways to approach this –


ways to go about both preventing it from happening, and to secure a speedy collection timeframe when it does. Our total overdues were about 20%.


So should we send all these claims directly to a collection agency? We decided to look at the details to figure out the reasons for them.


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Mats Bilden Credit controller, Nordic Choice Hotels


We can all agree that knowing your customer is key to further enhancing their experience of your service, and to expanding your business in a safe manner


What is hidden from sight? When analysing the invoices, we found several errors on the customers’ details. There were non-existing and wrong addresses, no VAT number, no reference person and so on. We asked ourselves: what would happen


if this customer changed their company structure? How could we know if they have payment problems? How could we know the financial situation of the company so that we could take the best collections action?


Building a strategy Who are our recurrent problem customers? We found there were quite few customers with many invoices, and they represented


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80% of the problems. We also found that the hotels did a lot of manual work on these customers. If they had not done that manual work, the results would have been even worse. Firstly, having correct customer


information is essential for a speedy and clean collections process. Without the basic tools, collecting money will be an exponentially longer process for each day that passes. In the hotel industry, where customers


come and go, it is key to have systems supporting a dynamic customer database. So what are the major areas impacting


this? It occurs in the booking system, but starts at the front desk. The turnover rate for front-desk


employees is the highest in the industry. A regular front-desk employee stays for three to nine months on average. This information can be used wisely. Obviously the front desk is the customer’s first physical interaction with the hotel – it is crucial that the customer is given a good first impression. Other than making the customer feel welcome, experienced professionalism is the second most important factor to the customer. Having a system that does not require


months of training to understand is, therefore, very important. The more secure


February 2016


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