SolutionsPT Data driven customer satisfaction
(Guardian (UK) Via Acquire Media NewsEdge) Happy customers and strong cashflow are inseparable for industrial automation specialist SolutionsPT, which has bounced back from the credit crunch to post new highs in client satisfaction and win prestigious awards as an employer.
SolutionsPT provides IT services to a range of industries and has clients such as Pfizer, Pepsico, Tata Steel and Greene King. It was awarded the Investors in People "gold" standard and is number 26 on the Sunday Times Best Small Companies to Work For list, jumping 29 places up the list in a year.
The company uses the technique of Net Promoter Scores (NPS), a metric for measuring customer satisfaction. "Increasing customer satisfaction and credit control procedures helped raise turnover between 2011 and 2012, resulting in increased profitability and cash generation," it says.
It sees a direct relation between how happy its customers are and how quickly they pay. As the NPS improved over the years, the amount of overdue debt decreased in tandem. NPS is now at an all-time high of 45%, compared with a negative position in 2007.
According to Phil Gillard, SolutionsPT's general manager, NPS "drives behaviour within the organisation, it elevates credit control. Credit control talks to sales to understand payment terms, and puts forward a solution earlier on in the process. We get in early to understand our customers' needs. And we hope people find it easy to do business with us."
The biggest risk to their cashflow is from "big organisations paying late, outsourcing their accounts payable functions, and trying to impose new longer payment terms without discussion," according to Neil Pearce, commercial director.
But smaller companies also present their own cashflow challenges. Gillard says: "We tend to risk profile smaller customers, rather than larger ones. We often consult the industry standard registers of these smaller customers to understand their credit limits. We are always looking one step ahead to get the right customer."
The company creates cashflow forecasts monthly and annually as a "matter of routine". But Pearce says that this is flexible: "We will do weekly forecasts at certain times of the year when our business cycle puts more of a strain on our cash."
Gillard adds: "We finance our growth from our cashflow, and we don't need to go for external funding or other sources like crowdfunding."
SolutionsPT also keeps a close eye on stock control. Pearce says: "We manage our inventory levels to balance customer satisfaction with the cost of stock holding."
For a company with IT at the heart of its business, it is no surprise to find that technology is used to back up cashflow management. SolutionsPT uses a variety of new technology, software and internet tools to help the business's cashflow.
Looking to the future Gillard is enthusiastic about the financial benefits to clients of "virtualisation technology", which pools hardware resources in manufacturing. JG
SolutionsPT says large organisations paying late is one of the biggest drains on its cashflow management
(c) 2012 Guardian Newspapers Limited.
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