Case studies published on this website have been archived, and some information and links may be out of date. This follows the acquisition of Albany Software by Bottomline Technologies in September 2012.
Over the past decade online payment has become a core component of every business model - from paying suppliers via Bacs to collecting payments via Direct Debits (DD). However, as many companies have discovered, inaccurate bank account information can delay payments, create significant administrative overhead and undermine customer relationships.
For Shanks Waste, the adoption of V-Series software tightly integrated with the Agresso Business World ERP solution from UNIT4, has significantly reduced the average 10% DD rejection rate. By automatically verifying customer bank account and sort code details at the point of data input, Shanks Waste has improved cash flow, reduced manual overhead and built trusted relationships with customers.
Shanks Waste Management is part of the Shanks Group, one of Europe's largest waste management companies. The company works closely with public and private sector organisations to increase recycling and reduce waste sent to landfill sites.
One of its fast growing business streams is the provision of waste collection services to a number of small businesses, including pubs, restaurants and retailers. Many of these companies only incur small monthly fees; with Shanks Waste rolling over invoices if the fee incurred is less than £50; taking payment on a quarterly basis.
Over the past few years, Shanks Waste has moved the majority of these smaller customers over to DD payments. As Michelle Brophy, ICT Support Supervisor, Shanks Waste, explains, "Shanks has gained benefit from using online payment processes to pay wages and suppliers for some time. There are also clear financial gains to be made by using DD for collection and reducing the administrative time associated with processing payments."
The company now has over 4,500 customers paying by DD; while the vast majority of supplier payments - to hauliers, utilities, contaminated land specialists and consumable providers - are made via the Bacs payment process on a weekly or monthly basis. The Bacs files are generated using the Agresso Business World ERP solution from UNIT4, with Albany's payment software handling the Bacs payment process.
Says Brophy, "The Albany Software solution provides excellent flexibility and security. It is a simple process to generate the file, and follow the stages of authentication to ensure the transaction is appropriately approved and validated. This segregation of duties delivers excellent control."
However, as Shanks Waste has increased the number of customers paying via DD, the number of rejected DDs was becoming untenable. "Around 10% of DDs were failing, between 80 and 150 every month," she explains. "It was only after we had created the new DD mandate on the system and sent it to the bank that we discovered there was a problem. By this time it was too late for collection - delaying payment for another month." Indeed, DD rejections combined with the really low collections - those under £50 - meant that Shanks Waste could deliver a service to a new customer without receiving a payment for up to five months. "This is not a good position to be in. It affects Shanks Waste's relationship with customers and affects their and our cash flow as well," Brophy confirms.
The volume of rejected DDs was not only delaying collections but also incurring additional administrative overhead. "Any administrative work to resolve DD problems on these low value customers can rapidly undermine profitability," she says. Similar problems were experienced with the creation of new supplier details for Bacs payments.
Staff time was diverted to trying to find out why the DD or Bacs payment file had been rejected - whether the customer had supplied the wrong sort code and/or bank account details; if the sales representative had incorrectly completed the requisition form; or whether it had been a simple transposition error at the point of creating the master file on the Agresso system. Similar time delays occurred with new suppliers: the company had to wait until the Bacs file was returned with an error highlighted before the problem was revealed.
Shanks Waste realised it had to change its model and adopt a solution for verifying customer and supplier bank details. But, as Brophy explains, the majority of solutions on the market only provide sort-code checking - something that is actually available for free online. "Actually, the problem for Shanks Waste was often that the bank account was wrong or the combination of bank account and sort-code was incorrect," she says.
The company has taken advantage of a new development between Albany Software and UNIT4 to integrate V-Series online bank account validation with Agresso Business World. The integrated solution automatically checks and validates supplier and customer bank account details as they are entered into the Agresso solution and instantly alerts users if there is a problem.
"Comprehensive data validation is key to achieving quick and successful payments - and reduces the costs associated with payment failures," says Brophy. "The seamless integration between V-Series and Agresso ensures bank details are checked whenever new customer or supplier master file information is created, or whenever a new DD mandate is completed."
By capturing this information at point of entry, Shanks Waste has created a seamless process that has required no additional user training. "If there is a problem with the bank account details, a pop-up appears immediately for users. If not, the process continues as usual," she says. "Staff can then immediately take the appropriate action to ascertain the correct payment details and resubmit the information."
As a result of adopting this comprehensive data validation method, Shanks Waste has seen a drop in DD rejections reducing bank charges, ensuring faster completion of funds transfer and improving cash flow. Critically, the company has seen significantly less administrative time spent on tracking down the correct information from its customers.
Throughout the adoption of this technology, Brophy confirms Albany and UNIT4 have worked well together to ensure the solution met the needs of Shanks Waste. "The two companies are also working together on a solution to provide bulk upload to automatically validate any new customer acquisition where customers are already using DD. This will enable Shanks Waste to seamlessly and efficiently incorporate new customers into the business," she adds.
Brophy concludes, "Whereas previously, a considerable number of man hours were spent resolving conversations and sending letters back and forth to customers to get the correct information, the integration of V-Series and Agresso has removed a significant administrative burden. Critically, it has also improved both cash flow and customer relationships."