Velvet debt collection

Each month, the Billing Department of DHL Express issues dozens of thousands of transfer invoices to customers. Additionally, some customers have special settlement conditions, e.g. compensation settlements (if the customer is DHL’s supplier). It requires a careful, individual approach to debt collection.

The Debt Collection Department located in Głuchów near Poznań, next to one of the company’s biggest logistics centers, is responsible for monitoring of receivables and debt collection. To understand the specific character of this work, imagine a big room in which 23 persons send e-mails or make phone-calls dealing with unpaid receivables most of their time.

The tasks of the debt collection department employees consist in contacting the customers, sending reminders about overdue payments and dunning letters, locking the services, and taking up further steps.

In most cases, sending the first call for payment results in a fast payment of receivables. However, there is some percentage of “special” cases in which it is necessary to take further steps of the debt collection procedure and to get the company’s money recovered – in fact, these activities take most of the time of the department employees.

Additional features of this work include the time pressure resulting from a dynamically changing situation and a very large number of handled customers and often stressful situations, which is natural when dealing with untimely paying customers.

For example, when the lock is set because of over-due payments and customer’s deliveries are not received for shipment, the customer usually calls the Debt Collection Department to clarify the problem. Then, it is important to be able to find the data regarding the reasons for the lock, dunning letters sent and the conditions for unlocking the service as quick as possible.

The business information that is transferred quickly cools down emotions. Also, it sometimes helps clarifying misunderstandings – e.g. when customer has paid, but the transfer had not been processed by the bank or posted in the DHL Express system.

Taking into account the scale and complexity of debt collection processes, a further increase of the debt collection effectiveness was not possible without the IT tool which would meet the specific DHL’s needs and simultaneously fit in the existing IT landscape.

That is users who decide

Due to the necessity to keep the consistency with the SAP system used in the company, the preferred variant was to create the solution in the SAP technology. Because of the complexity of the debt collection process management, BCC suggested the preparation of the tailor-made solution in the ABAP programming language.

It rarely happens in IT projects that the tools satisfy the “wish list” of direct users to such a degree. However, in this case it was different, because the objective of the project was not only the improvement of the work efficiency of the Debt Collection Department or a better communication with the customer, but also the improvement of the comfort of work which, after all, involves a pretty big stress.

That is why during the creation of the solution concept a lot of time was dedicated to consulting and agreeing with the users the final form of the tool.

That is the users who had the deciding voice in defining the requirements and functionalities, including the details of the operation and appearance of the screens and content of reports.

A quick data access

From the middle of August 2009, the solution for the data and event registration and for contacting payers created by BCC consultants has been running in the Debt Collection Department. A new tool allows to gather all events in the debt collection cycle, register a very large amount of contacts and data so as not to loose the information, not to skip any important transaction in the cycle, and at the same time to increase the effectiveness of the debt collection while retaining good relationships with the customer

Additionally, the application seamlessly integrates with the SAP system in the FI area in which settlements with customers are kept and invoices and dunning letters are issued.

The collector console is a central point of this tool. In the system, all customer information is recorded (data on the company and its branches, contact persons, receivables, turnover, status, etc.) and all events and interactions are registered (sending a dunning letter, e-mail, a phone call, setting and removing the service lock, sending the compensation, balance confirmations, customer response, etc.).

Thanks to a clear and ergonomic interface of the console, the employee of the debt collection department may easily and quickly gain access to the searched information on a specific customer on one screen. Currently, gaining the information on the contact history and customer status is possible practically within a few seconds after the payer number is entered.

Additionally, the system informs on the customer category – e.g. VIP, which may be connected with another procedure and may require the notification of other people in the company about the event. In case of strategic customers, the information on overdue payments is transferred to the account manager from the sales department with which a further procedure is determined.

A very important functionality of this solution is the automatic distribution of information on events to a large number of other DHL employees. Master data management department, account managers and terminal employees receive the information on the customer locking process.

The decision to lock the customer by the Debt Collection Department is immediately sent by e-mail to all terminals servicing the customer. Therefore, DHL avoids receiving next orders from this payer. It is in a similar way in case of unlocking – just after the payment is effected by the customer and the decision to unlock the customer is made, the information is immediately propagated to terminals receiving shipments.

Simplification of the debt collection process

The new tool comprehensively supports the work organization of the Debt Collection Department. In DHL Express, the whole debt collection process is based on a monthly cycle. Consecutive debt collec-tion cycles are planned in the department calendar. The deadlines for all important activities in a specific cycle are entered, i.e. sending the calls, setting a lock, transferring to the Debtors Register, mass e-mail distribution, etc.

Based on the department calendar, the employees of the Debt Collection Department plan and perform their daily work. They have own calendars in which they record individual tasks. If the task is not performed for any reason, the system reminds on overdue activities.

Planning of tasks may be individual (related to a specific customer) or mass (e.g. e-mail to all customers for which the payment date expired as of the month end).

Currently, all these events are registered in the system and are easily available in the collector console and reports.

The debt collection management system automates most of the schedule-related operations. Firstly, while generating dunning letters, it creates and sends e-mails with attachments to payers. Secondly, while setting or removing the payer lock, it notifies by e-mail the persons from the sales department, the customer master data management department and terminals.

The mails sent are attached listings with any payer data expected by addressees.

Previously, the same actions required a huge effort and were very time-consuming – it was necessary to export the data from SAP FI and other systems to an Excel sheet, prepare and format it appropriately so that it was possible to create e.g. a mailing list, verify the data, and only then the data could be sent.

With this application, spreadsheets has been elimi-nated, but time saving is the most important benefit. A significant relief of employees from painstaking and repeated administration tasks allows to more exactly verify each case, for example to check the reasons for delays in payments. Now, there is more time for a careful verification of the customer status in unclear situations.

This is important for maintaining a high level of cus-tomer service, especially when part of customers are settled in a non-standard way according to in-dividual settlement conditions. Although this information is in the system, non-standard situations generate non-standard problems that need to be resolved – this requires additional time.

Reporting

The tools are supplemented by the reports developed by consultants. The information contained in them, their layout, and even appearance were agreed, column by column, with the users. Therefore, they meet the detailed reporting needs of the Debt Collection Department.

The tool enables reporting by the customer master data (e.g. payment date, billing cycle or a sales region), by event types (e.g. outbound call, second call for payment), by calendar entries and others.

However, in daily work, the main receivables aging report which takes the overdue receivables data from SAP FI in the easily definable interval breakdown is the most important. The reports were prepared in such a way so that finding the needed information was quick and very flexible. Advanced selection screens were prepared to allow creating the complex queries based on events connected with individual payers.

On the other hand, the report on the work activity, prepared for the use of the Debt Collection Department, is the source of information on the subordinate work effectiveness, contact statistics and expired contacts.

Reports on the workload of individual employees allow to better plan their work – it shows work overload and underload, which in turn allows to reasonably divide responsibilities, e.g. in a leave period and in case of longer substitutions.

The authorization system controls the access to functions and the data in the tool. Individual employees have unrestricted access only to “their” customers, and additionally they can see the data on all other customers – with a very limited editing capability.

This functionality is useful when it is necessary to contact the customer who is usually managed by a temporarily absent employee.

There are often the following situations: the service is locked, customer shipments are not received, the customer is upset, he calls the Debt Collection Department where it turns out that the employee who manages this customer had to leave for a meeting. The situation is tense.

Previously, it was not possible to check the reason for sending the call for payment without an access to the computer of an absent employee. Currently – after entering the customer number – each department employee can immediately see on his own screen the contact history, correspondence sent by the customer and activities taken up. At the same time, he can add a new task to the calendar of an absent colleague, e.g. “Contact Mr. X from Y. Last payment needs to be clarified”.

This allows to defuse the conflict situations and has a positive impact on the quality of work and the level of customer service – it is out of the question that it is not possible to give him the basic information on the reasons for dunning letters or a lock only because his account manager is not at his desk.

Additionally, a substitution mechanism has been entered in the application. The manager can define which employee or employees will substitute an ab-sent person, e.g. going for a leave. In that period, a substituting person can make any transactions on payers of the substituted person.

The task which the debt collection department con-fronts seems to be impossible – to effectively settle the overdue receivables while retaining good relationships with the customers. In the described project, the assumption that it is worth meeting the specific expectations of persons who in stressful circumstances deal with these contradictions every day turned to be true, because only such approach will lead to the increase in the quality of work and better work effects.