“Not putting out fires but preventing them from happening” Sigrid Donkers, explains how the Credit Control team has switched to proactive credit management.”
Advantech’s mission is to serve companies around the world with excellent industrial system integration, hardware, software and automation products. With more than 8,000 employees in 23 countries in 95 major cities worldwide, Advantech achieved sales of 1.5 billion USD in 2017, of which 60% was achieved in North America and China.
In Europe – accounting for 15% of global sales – Advantech supplies products to large and small industrial customers in more than 20 different countries. “This requires a special degree of flexibility from the credit control department in Eindhoven,” says Sigrid Donkers, Credit Manager at Advantech Europe B.V. As Advantech is at the forefront of innovative developments when it comes to the production of high-quality industrial computer platforms, customers from all over the world know where to find them. Which is clearly showing in the growth figures. Sigrid: “Our team manages more than 2.000 active debtors and that number is growing fast. Advantech has the growth objective of achieving € 350 million in sales by the year 2025. Our customers come from all over the world, which means that our Credit Controllers have to take into account various languages, culture differences and customer types. Which makes us very dynamic.”
Since the arrival of Sigrid, customers are divided into the segments Northern, Central and Southern Europe. “Our Sales department was already working with these different segments. However, in terms of credit management everything was still pile up in one segment. It was therefore, time for some changes and a big clean up. We started with the internal processes and made an inventory of which data was stored where. Due to this we could enrich our customer information in the Credit Management software of CreditDevice with debtor data from other systems. From that moment on, we were able to also use customer segmentations within the credit control department: Northern, Central and Southern Europe and the risk segments: clients, channel partners and key accounts.
Apart from sales, this segmentation is also very important when it comes to credit management. The customer segmentation allows Advantech to tailor the dunning process based on these segments. Due to these changes, the credit control team has switched to proactive credit management. Sigrid explains: “With proactive credit management it is important that you know and address your customers using the right tone of voice. Thanks to customer segmentation, everyone in our team can manage it’s own customers. This is good for the customer, because they always communicate with the same manager. And it is also better for ourselves as we now have a clear insight in our client portfolio and can manage it more precisely. “Not putting out fires but preventing them from happening”.
Fire prevention, has become Sigrid’s motto. “Putting out fires is a waste of energy. I rather prevent them’’. With this Sigrid refers to proactive credit management. “We have changed our dunning process based on client segments, so we can address all our clients, from smaller clients to key accounts, using the right tone-of-voice. In this way, we can use the client- and cultural differences in order to seize opportunities and better understand our clients. Understanding is an important aspect of credit management”, says Sigrid. By keeping close contact with our clients, we know what is going on and we can identify possible risks.
“Proactief Credit Management is more than just debtor management”
Sigrid emphasizes that risk management is not only important during the dunning process. Before a prospect becomes a client, a large part of the risk is covered by thoroughly analyzing prospects and customers and then determining our risk. “Before a customer can order on account, they go through a procedure where the credit control department checks the creditworthiness of the potential client in advance: the credit acceptation process. The credit control team collects client information and makes calculations and forecasts based on the information they receive. Credit assessments, as we call them, are part of our acceptance guidelines”. Credit assessments are regularly supplemented with the information available from Sales, credit reports from CreditDevice and weighting factors, such as country of origin and company size.
“With this complete dataset in hand, we can make a good estimation of the reliability of our customer. In this way, a very promising start-up, can for example get a larger credit limit in order to have more chance to grow its business.”
Receiving information from Sales is crucial to make a good risk analyses. ‘’You can say that the cooperation with Sales has tripled since I started working at Advantech’’ says Sigrid. ‘’I am really happy with this cooperation. Sales often knows things that we don’t and vice versa. Partly due to information sharing we have strengthen our collaboration’’. It was Sigrid’s wish to strengthen this relationship as it is a waste not to use information that is available within your organization. ‘’Risk management cannot be managed on one island within your organization. At Advantech, Sales is involved in the credit acceptation process from the beginning on. They are being consulted when it comes to drawing up credit assessments and are able to request credit information reports themselves.
The credit reports are requested via the CAM-module in the software of CreditDevice. Within this module acceptation guidelines are defined, which makes it a no-nonsense tool, that clearly shows whether you can do business with a company or not. The credit acceptance process contributes to a clear structure of decision-making powers. “This is important when it comes to the communication with international parties, such as our head office in Taiwan. With the reports from the Credit Management software of CreditDevice and the CAM-module, which are closely connected, we can easily inform our head office in Taiwan why we have made certain decisions and which successes we have achieved.
“We are very happy with the close cooperation with the sales department”
“I only speak of success when everyone is satisfied,” says Sigrid. “And then I am not only talking about our customers, but also about Sales and Credit Control. By thinking commercially and also acting on it you can achieve much more in a commercial organization such as Advantech. We operate internationally and are growing fast, which means that it is essential to adapt to commerce. “You cannot be rigid and do your own thing because then you are not flexible enough to keep up with a growing organization. By also implementing this commercial way of thinking in Credit Management you are able to communicate as one organization with your clients and be flexible at the same time”.
“Take for example the enormous growth in debtors and sales. Such success can only be handled when you have a good foundation. And the good thing is that we can still manage it with the same credit control team. This means that we are able to carry out more work with the same number of people’’. Nevertheless, Sigrid expects an even bigger growth” “I believe that our team will also grow in terms of FTE’s. In the ideal situation, credit control will transfer to commercial credit management where we are already involved from the beginning. In my opinion, working proactively is the secret, and then according Advantech’s core value: Personal Credit Management as a value-added partner, for our internal and external customers”.
“Credit management no longer has a back-office function, but is an essential part of today’s business operations”.
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