Significantly reduce the number of write-offs

Rick Dijkers | Credit Manager | PreZero Netherlands

Every year we produce about 500 kilograms of waste per person. At the office, at home or on the street, everywhere we go we throw something away. Very valuable, PreZero believes. With more than 160 years of experience, PreZero is one of the world’s largest companies focused on recycling. As a driver of the resource revolution, PreZero uses waste as a new raw material. For example, they develop smart solutions to turn waste into raw materials for new products. In the Netherlands alone, PreZero collects the waste of over 60% of Dutch municipalities and over 80,000 companies use their services. With this company size, well-organized Credit Management is a must.

Achieving success by looking ahead

“A lot has changed in the last 10 years in the world of credit management,” says Rick Dijkers, Credit Manager at PreZero. When Rick started as team leader accounts receivable, everyone was responsible for their specialty, but no one felt responsible for the customer. “We were able to turn this around to full responsibility. Everyone on the Credit & Control team is now responsible for the full service of a customer portfolio. The ‘all-round teams’ have the result that we can take a customer-specific approach and it ensures that work never comes to a standstill.”

As part of the transformation to all-round teams, Rick created a credit management policy for PreZero. A customer acceptance procedure was introduced within the new policy. Rick emphasizes the importance of the credit management policy: “To avoid risks before doing business with a company, you need information. That is why in 2014 we started looking for a party that was more in line with this way of working. After extensive research, CreditDevice came out on top.”

Infoscore module from CreditDevice

The success of the customer acceptance process depends entirely on accurate information. To make the customer acceptance process run smoothly, PreZero uses CreditDevice’s infoscore module. Infoscore is a decentralized product that runs on a role-set that PreZero created in collaboration with CreditDevice. Rick indicates; “The reason CreditDevice is such a good fit for our way of working is that they are not just a supplier, but act more as a cooperation partner. In consultation, we set up and configured the criteria for customer acceptance. The Infoscore allows us to know immediately how a company is doing financially and whether or not you can do business with a company without further ado. Infoscore provides us with clear advice that we take into account in our decision-making.” By analyzing the risks, PreZero determines what terms and conditions are set up. Here you can think about prepayment, direct debit or, if large amounts are involved, a bank guarantee. “Based on this information, you can attach a personalized dunning strategy to each customer. This gives you a clear picture of who your high-risk customers are and allows you to exercise more targeted debtor management,” Rick explains.

Good cooperation

Now that we can use the Infoscore module to provide insight into why we can or cannot do business with a prospect, communication with sales is much easier. In the past that was sometimes difficult when it came to credit management. “Before the implementation of the credit management policy, sales itself was responsible for the customer acceptance process,” says Rick. “This with the consequence that if payment was not made afterwards, the Credit & Control department was called in to solve the problems.” Good cooperation ensures that you know in advance whether it is profitable to go to a prospect and do business.

A win-win situation for Sales and Credit & Control department

Introducing the new way of working initially took a lot of doing. Rick explains: “The sales department was afraid of losing sales. They thought that at least half of their prospects would be rejected. By working with Infoscore and involving the sales department in the process, the Credit & Collection department was able to demonstrate that the new way of working had nothing but advantages. Instead of losing revenue, Sales now spends much less time ‘chasing’ non-paying customers. The sales people have more time to really focus on the business. A win-win situation for both parties,” says Rick.

70% less depreciation

In addition to improving internal processes, a good customer acceptance process also causes DSO (Days Sales Outstanding) to drop and cash flow to improve. So Rick is enormously pleased with the results since the new customer acceptance process: a drop in write-offs of over 70%. “This is a big win, because it means that not only do you have fewer write-offs, but we can spend our time much more efficiently. With that, we are perhaps achieving the biggest result.”