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Corona good for Credit management at Advantech

With its European headquarters established in Eindhoven, Advantech is a multicultural organization with employees from all over the world. It is a dynamic and flexible organization, constantly looking for new ways to embrace the trends of the Internet of Things (IoT), big data and artificial intelligence to assist business partners and clients in connecting their industrial chains.

Developing people is one of the main focusses of Advantech. According to Guido Wurring, European Financial Controller at Advantech, there are a lot of success stories of employees who have developed themselves and have grown within the organization. A good example is an employee who started in the warehouse and has grown to the leader of a sales team. If you are motivated, keep on developing yourself and show engagement, Advantech will offer you the opportunity to grow.

Development of the credit management department

When you offer your employees room to grow, this positively influences the growth of the organization. With a turnover increase from 80 million in 2014 to 225 million in 2019 the success of the organization speaks for itself. Also, when it comes to credit management, a lot has changed. Back in 2009, the company partnered with CreditDevice, when Guido Wurring started the credit management department at Advantech Europe.

Over the past years, the credit management department has matured enormously. According to Guido, the main reason why the team could develop themselves as much, has everything to do with the software of CreditDevice. With the constant improvement of the software and the development of new features, it was easy for the department to pick up on these innovations and improvements.

Creating the perfect balance between credit management and sales

The cooperation between the sales- and credit management departments has become more important in many companies. After all, the sales team is constantly in contact with the customers and has access to inside information, which could be very useful for the credit management department. Also, within Advantech, the cooperation between sales and credit management has improved over the years. However, when Guido came back to work for Advantech in 2019, after leaving the company 5 years ago (or in 2014) , he noticed that the focus was more on strategic issues instead of solving credit management related issues.

“The main goals of credit management should always be on firstly preventing risk and damage for the company and secondly to collect money. To do so, you need to involve other departments and work together without losing sight of what is most important. Therefore, over the past 10 months, we moved a little bit away from serving the sales department.  We focused on risk prevention, collecting money and solving disputes, while involving sales when needed. Of course, we are still supporting our sales team. We should not lose this out of our focus, but we need to balance these four areas in a good way”, says Guido.

Transparency is key

According to Guido, to create this balance, you need transparency and partnering with the sales department.  We (The Advantech CM Department), therefore, developed a communication concept for credit management. Integrating the software into this concept is an essential and very important part. With this concept in mind sales can now access the credit management software of CreditDevice to view only information or to add / amend crucial information. In this way sales can see exactly what the credit managers are doing, see the behaviour of their customers and most importantly understand that their colleagues are transparent in their decisions.

“If we are transparent towards sales, we create understanding and there is of course always room for discussion. I have to say that during this transformation the software of CreditDevice has been a huge help. We moved the communication between our customers and sales more and more towards the credit management software, instead of sending e-mails via Outlook. Especially, when it comes to urgent requests or information, I asked the sales team to always use the software. This does not only mean that everything we do is documented within the software, but it also means that it is scheduled, and we never lose it out of our focus”, adds Guido.  “I, therefore, always call the software of CreditDevice, a Customer Relation Management system (CRM) for credit management”.  The next project is to use the dispute management system, within the software, more effectively. By involving other departments in dispute management, the disputes will be solved faster, and everything will be documented in the system. “An important next step in becoming even more transparent, within the organization, and to get the acceptance we need” explains Guido.

Corona good for Credit management at Advantech

When asking Guido, what effect the corona crisis has on Advantech Credit Management, he reacted surprisingly positive. The number of customers increased from 7.000 in 2014 to 17.000 in 2019, which is a tremendous increase meaning that the focus was mainly on increasing business. When the corona crisis hit Europe in March 2020 and the turnover dropped, the focused changed. Companies had to close their offices, could no longer pay their invoices or asked for instalment plans. Meaning that the overdue amount of 30 days and longer increased from less than 4 percent before the crisis to 12,8 percent in May 2020. Due to the credit management software of CreditDevice, team effort and good communication with both sales and their customers, they managed to reduce the number from the high peak in May to 2,21% in November 2020. This is one of the best results Advantech has had within the past 2,5 years without damaging the customer business relationships.

Changing mindset

The fact that they could reduce the overdue amount of 30 days and longer is, of course, a great result, especially during a crisis. But this is not the reason why Guido feels that the corona crisis has had a positive effect on credit management. This has to do with the changed mindset of the employees at Advantech and especially the sales department. People have become more sensitive regarding credit limits, risk prevention, overdue invoices and what it means when the money is not coming in. Guido says, ‘’everybody understands that the turnover dropped not because we have bad products, but because our customers are not able to pick up their products or because the offices are closed. Due to corona, the mentality within the organization changed. “We involved our sales department into the communication with our customers according to our transparency alignment. This has increased the risk sensitivity of our sales and cooperation.” Also, now during the crisis, the software has helped us to pick up critical issues right away and schedule our activities, if a customer did not pay its invoices while involving our sales departments. We never lost our customers or their financial issues and the demands of our sales team out of sight due to the credit management software.

Company effort to survive this crisis

Guido concludes that even though he sounds ‘positive’ about the effect corona has had on his department, it takes a huge effort of all employees to survive the crisis. Everybody is working together, and employees are engaged 150%. ‘’The big challenge is to continue the understanding of how important the role of credit management is.  This is something we need to focus on. Because whenever corona is over and the turnover increases again, we need to be very careful to not to go back to how it was before. We must keep the focus. This will be one of our challenges over the next few months”, explains Guido.

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