In 2013, insolvency rates are projected to increase by 2% in France (a total of 62,190) and by 8% worldwide. The most recent Euler Hermes study on customer risk also indicates that 56% of companies surveyed experienced late payments from customers within the past six months, and 42% of those responding estimated that payment delays would increase in 2013. The difficulties experienced by French companies in obtaining bank financing are weighing on their net cash positions. Given the current environment of increasingly scarce liquidity, companies need to manage their working capital requirements and assess customer risk more effectively. Cash performance is a core concern for the companies surveyed. Between 5% and 10% of their sales are tied up in the operating cycle. Working capital management provides a company with a powerful tool for generating cash, namely optimizing the receivables cycle, as accounts receivable account for nearly 40% of total assets. Identifying the source of demand and focusing on relations with reliable trading partners at both the local and international levels is essential for a company’s performance and sustainability.
An exclusive partnership for a new approach to credit management
Euler Hermes, the worldwide leader in credit insurance, and Sidetrade, the European leader in financial customer relationship management, are combining their skills to offer large corporates a key tool to support their commercial and financial performance. Thanks to its database of more than 40 million companies, Euler Hermes helps companies optimize their customer prospecting, commercial negotiations and sales force management as well as manage risk-taking by making these tasks more transparent. Sidetrade, European leader in financial CRM based on a SaaS platform, offers finance departments a unique web platform allowing a structured handling of customer reminders, disputes and risk management.
“We enjoy significant complementarity in terms of our capabilities. With this new cloud-based solution, which strengthens our line of web services on behalf of corporates, we are combining the power of Euler Hermes’ information with Sidetrade’s expertise over the entire sales cycle. Users of this service benefit from enhanced intelligence and responsiveness in their commercial development in France and abroad,” explained Nicolas Delzant, the Chairman of the Executive Board of Euler Hermes France.
Only 5% of all companies have professional receivables management solutions. Companies do not have IT systems adapted to manage customer outstandings. “With this ground breaking solution in the credit insurance market, our joint ambition is to enhance Euler Hermes’s data in all trade receivables management processes. Prioritizing customer reminders based on the evolution of granted trade credit limits, and sharing the information between sales, operations and finance will bring immediate benefits to all finance departments,” notes Olivier Novasque, Chairman of Sidetrade.
EH Intelligence by Sidetrade will be marketed in France as of June before being launched in the United Kingdom in November.
EH Intelligence by Sidetrade, the cooperative “business-to-cash” cycle management solution
This new solution is aimed at companies seeking a financial customer relationship management application. “EH Intelligence by Sidetrade provides sales support during the prospecting phase and gives the sales force and credit team an instantaneous, overall view of the financial health of prospects and established customers throughout the entire sales process; it amounts to a 360 degree view of the customer,” says Henry Bourny , the Head of Credit Management at Cemex.
“EH Intelligence by Sidetrade represents also an outstanding opportunity to strengthen a company’s risk culture,” adds Olivier Novasque.
The application makes it possible to optimize and accelerate company decision-making by focusing sales efforts on accounts guaranteed to be financially sound. Thanks to the automatic monitoring of outstandings and guarantees, the teams receive real-time warnings as to changes in an account’s situation and can thereby fine-tune the insurance guarantees and internal credit limits.
As an added benefit, the company can adjust its internal reminder policy depending on its risk situation. Getting information to the right people helps to speed up dispute resolution while enhancing the effectiveness of amicable collection.
Lastly, the consolidated view provided by this application makes it an effective financial communications tool, since receivables optimization and control can facilitate access to financing, whether generated internally or through external borrowing, as companies gain credibility with banks and factors.
“Improving customer risk management and highlighting the importance of the company’s cash performance provides company finance departments with a mechanism for improving performance,” concludes Henry Bourny.
1 Source: Euler Hermes forecasts
2 Source: Euler Hermes forecasts
3 Euler Hermes 2013 Risk Barometer
4 CRM: Customer relationship management
5 SaaS: Software as a service
6 Early adopter of the service
7 Early adopter of the service