Minimal damage at less cost

• Peter Klijn | manager finance customers & treasury | DSG Diensten B.V.

Construction materials supplier DSG Diensten BV (hereafter DSG) is deliberately not credit insured. The firm’s motto is: ‘You should only insure what you cannot bear the burden of yourself’. In terms of debtor management, DSG solves this with careful policies and corresponding analyses. CreditDevice is a valuable partner here, especially because of all its knowledge of the construction sector.

DSG: wide range of customers

DSG, which includes Stiho, Baars & Bloemhoff and Bouwcenter Filippo, supplies any Dutch company needing building materials on a daily basis. This ranges from contractors to the handyman around the corner and large, nationwide construction companies. Peter Klijn, Manager Finance Customers & Treasury at Stiho, has held many positions within the company and has enjoyed driving from Brabant to Nieuwegein for 14 years. Marketing, sales support, CRM, business & control and banking and insurance: he has had it all under his belt. Recently, he became responsible for both accounts receivable and accounts payable within DSG. After integrating the different teams, the new team will consist of 23 people by the end of this year.

Customer-levelestimation

According to Peter, the contracting industry has become a lot more creditworthy in recent years. This has also influenced the interpretation of credit management at DSG. “During the banking crisis, we were still credit insured, but we haven’t been for a few years,” he says. “That provides more policy freedom and new opportunities. At the same time, you have to absorb damages yourself. Every year there is a major setback. Then it is important to use the knowledge we have and the noises we hear to make a correct assessment at customer level. We use CreditDevice’s credit reports and advice as a guide for this, but our own payment experiences and the turnover that comes with them count at least as much.”

Signallingchanges

Suppose DSG is about to accept a new customer, but suddenly notices changes, what happens then? Peter: “Then first of all we ask the account manager or branch manager if they are experiencing the same thing. Often we also put it to CreditDevice: can you explain where this decline is coming from or why we get a different opinion from our own figures? Depending on the answers and on the relationship with the client, we act accordingly. Sometimes we refrain from doing business, but usually we find a tailor-made solution. Precisely by timely analysis and comparing our limits with the credit limits from the reports, you try to get ahead of this kind of situation whenever possible.”

• ‘We do set a target on our claims every year and we have stayed below that for the past three years. We have been able to keep claims at at least the same level with lower costs ‘.

Why CreditDevice?

DSG happily partnered with CreditDevice in 2017 after a period of ‘successful shadow running’ . Peter: “We are very satisfied with the service, the combination of products and the value for money. The approachability is also pleasant: if we have any questions, we get a quick response and clear explanations. It also adds value that CreditDevice has so many relationships with similar companies in the construction sector: This gives us better insight into payment behaviour within the sector as a whole.”

Risk analysis

“For every new customer who wants to buy something on credit, we request a credit report from CreditDevice for the benefit of the respective debtor manager. On a monthly basis, this amounts to 150 to 200 reports. Also, if we need a higher limit for a client or if a client is above a certain turnover, we periodically check that there are no crazy things on the balance sheet and request a new opinion. With just under 1,000 clients, we do such a check annually, so that’s about 20 per week. That’s quite manageable. Of course, we don’t do everything manually. Every week, all changes above a certain percentage reach our senior in the mailbox. That filters everything by the degree of risk and outstanding amount and then certain actions come out of that. We have about 3,000 to 4,000 applications a year, so a tool like this helps tremendously with that!”

Number of damages contained

Peter finds it difficult to indicate whether working with CreditDevice has resulted in fewer claims, because several factors play a role in this. ” Taking risks is part of doing business and unfortunately damages are a consequence of that. Every year, we do set a target on our claims and we have stayed below it for the past three years. We have been able to keep claims at at least the same level with lower costs. But yes, the future is of course uncertain now . As far as corona is concerned, the blow is yet to come. So what will happen after the construction period, is incredibly exciting.”