Reducing losses to $100,000 dollars per year for a distribution company, by automating the end-to-end process.
BRIEF
A distributor company (it distributes +80 brands) based in Colombia had a big sales force with more than 150 people and used individual accounts per employee to register their business expenses. The process to track and reconcile expenses was cumbersome with a lot of errors that produced losses by $ 120,000 dollars per year (i.e. wrong accounting entries, control inefficiencies). The client requested a solution to improve this process end-to-end and the working capital.
SOLUTION
A process review was performed based on the information provided by the client on the expenses done by each employee (one year analysis) classifying the expenses by type and location where they occurred.
As result of this analysis, we suggested the customer to conduct an evaluation with banks on a banking solution based on corporate cards.
Banks were invited to participate in the bidding process after an RFP was issued to all of them. One bank was awarded with a solution allowed the client to implement the use of a corporate card for each sales rep. The solution included the integration via file from the bank to the customer’s ERP to automate the process, which helped to reconcile expenses against payments automatically.
Results & Recommendations
Once the solution was fully implemented the client was able to reduce losses to $ 100,000 dollars per year, as the process was automated end-to-end avoiding any type of manual error.
Also, as the corporate cards were debited in a single transaction 25 days after the statement cutoff date, there was an improvement in the liquidity management for this process and up to 45 days’ financing.