‘Credit Management Roadmap to Improvement…’

Building Credit TogetherOne Team One Goal

‘Credit Management Roadmap to Improvement…’

The Credit Management Journey

‘Building Credit Together’One Team One Goal

European ConferenceAmsterdam 14th – 16th April

2013

Nick King, MICMGroup Credit Director

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HEADS or TAILS

HEADS or TAILS

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SETTING THE SCENE

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Strong group brands

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http://www.travisperkins.co.uk/

http://www.keyline.co.uk/

http://www.cityplumbing.co.uk/

http://www.ccfltd.co.uk/

http://www.wickes.co.uk/

http://www.benchmarxjoinery.co.uk/

http://www.tilegiant.co.uk/

http://www.toolstation.com/shop/

http://www.cityheatingspares.co.uk/

http://www.bssindustrial.co.uk/

http://www.dhsspares.co.uk/styles/dhs/static/default.html

http://www.fpwholesale.co.uk/

http://www.birchwoodpricetools.com/

http://www.askdes.co.uk/

http://www.ptsplumbing.co.uk/

http://www.ugs.uk.com/

http://www.spendlovecjebbbelfast.co.uk/


Business Overview – 4 Divisions with shared support

GeneralMerchants

SpecialistMerchants Retail

BUSINESS DIVISIONS SUPPORT FUNCTIONS

Supply Chain

Finance

HR

IT

Property

Commercial / National Sales

MarketingPlumbing & Heating

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Renewable Energy

SOLFEX Acquired by TP Group in Jan 2013

SOLFEX energy systems is one of the UKs first and leading innovators and suppliers of solar energy systems.

Allow TP to offer our customers an integrated approach to energy efficient building

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Key Figures

• £5 billion t/o – 2012• Excluding retail = £3.6 Billion• Total Staff = 25,000• Total Branches – 2,000+ (over 19 brands)• 137,000 to 140,000 credit account Customers• Receivables Ledger of £ £300,500,000• DSO y/e 2012 = 56.45• Bad debt Provision - £5 million • 37,000 cheques per month total value of £85 million• 50,000 bacs payment per month value of £154 million

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Organisation

Total Credit Services Staff = 253

Bus Unit

Managers

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From the Beginning

• Started in October 2011• Follow in the Steps of Predecessor• Integration of New Business• Difficult Market Conditions• Insurance Renewal (BSS Group)• Change of Mind set• Art of Delegation

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Integration of BSS Group

GeneralMerchants

SpecialistMerchants Retail

BUSINESS DIVISIONS SUPPORT FUNCTIONS

Supply Chain

Finance

HR

IT

Property

Commercial / National Sales

MarketingPlumbing & Heating

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BSS Integration

• Staff structure• Insurance• Credit Limits• System and Process• “Them & US” Mentality

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PERCEPTION

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TP Group

• Attitude• Skill Level• Engagement• Knowledge

• System• Policy• Relevance• Control/Audit

• Tools• KPI• Reward• Opportunity

• Functionality• Integration• Fit for purpose• Technology (latest)

People Process

Performance

Measurement

IT/Systems

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Perception


People

• Complacent• Lack of Investment• Low Engagement• Low to Medium Skill set• Not engaged with peers “credit

industry”• Loyal• Knowledgeable about Industry• Low to medium attrition • Willingness to do well• Made best of a bad job

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Perception

People Process

Stale/FragmentedMinimum control/review“Make do”

WorkedUnderstood and Accepted (with region)Integrated into systemDoes the job

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Perception

Performance

Measurement

OutdatedComplicatedManualNot understood/communicatedNot flexibleReward not seen as beneficialAcceptedDelivered the results

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Perception

IT/Systems

Lack controlOld technologyFragmentedPoor reporting capabilityLack of investmentDoes the jobIntegrated into businessHas good collection capabilityOpportunity to invest

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Mountain to Climb

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THEN YOU WILL ALWAYS GET WHAT YOU ALWAYS GOT

IF YOU ALWAYS DO WHAT YOU ALWAYS DID

REALITY CHECK

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The Credit Management Journey ‘Credit Management Roadmap to Improvement…’

Organisational Alignment

Customer Focus

Consistent MI

Professionalism

One Set of Rules

Process & System Standardisation

Credit Strategies

Operational Excellence

Enablers

Professional &Customer FocussedCredit Management

FragmentedCredit Management

Differentiators

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Customer Focus

Consistent MI

Professionalism

One Set of Rules


Credit Strategies


Enablers

Differentiators

Single Organisation for Credit Management• Group integration• One Team mentality• Single Organisation Archetype • New Risk Department




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Customer Focus

Consistent MI

Professionalism

One Set of Rules


Credit Strategies


Enablers

Differentiators

One-Credit Learning Programme• Group Credit Management Learning & Development Programme. • Competency frameworks• Professional membership (ICM Group membership)• Career Ladder• Reward Programmes




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Perception


• System• Policy• Relevance• Control/Audit

• Tools• KPI• Reward• Opportunity

• Functionality• Integration• Fit for purpose• Technology (latest)

People Process

Performance

Measurement

IT/Systems

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Organizational Structure

Mentor

Career Ladder/Succession Planning

Professionalism

Credit Management Learning & Development Programme

Right Person, Right Job

Credit Academy

Reward & Recognition

Enablers


Current Status

DifferentiatorsPeople

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Enablers

Differentiators

Job v Correct Talent• Individual Assessment Programme• Myers Briggs Process Introduction• Management Attitude, Desire Job Review • Aligned Recruitment Process• Key Point Talent Attraction Rules • Job Evaluation/capability – Grid Programme• Support and mini mentor Programme• Recurring Review Process and realignment


Current Status


People Mentor

Career Ladder/Succession Planning

Professionalism

Right Person, Right Job

Credit Academy


Credit Management Learning & Development Programme

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Credit Manual

Enablers

Differentiators

Single Manuel that fits the Business•1 single Group Updated Manual• Sign of by Executive Team• Awareness, roll out to Whole Business• Review Team and Time Frame


Current Status


Online Trading/Management

Reporting

KRA’s

Process Manual

Risk

One Platform

Proactivness

Process

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Enablers

Differentiators

Single Measurement to Drive Performance• Review of current KPI’s• Align to Business• Drive continued Performance• Automated, Easy, Delivery


Current Status

Professional &Customer FocussedCredit ManagementPerformance

Measurement

Measurable KRA’s

Linked KRA’s

Personal KRA’s (Development Plans)

Tolerance Levels

Time Lines

Influence/Non Influence

Pulls and Push of Tolerance


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Enablers

Differentiators

Correct External Systems• Review all current external systems (do they add value)• Are their better alternatives than current offering?• What will happen if we changed ERP system?• Are we missing something? (right tools)• Review External v Internal (cost, support, development)

•(* Include NEXUM and sales ledger and risk)


Current Status


IT

Equipment

APPS

Development

External

System/s

One Platform

Multichannel

Customer on-line

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Customer Focus

Consistent MI

Professionalism

One Set of Rules


Credit Strategies


Enablers



Differentiators

Start Point

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‘Building Credit Together’

Achieving Quality in Credit Management


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• June 2012 – QiCM Project Team Founded Criteria Discussed and Evaluated Task Groups formed for Accreditation Areas

• August 2012 – Stakeholder Group founded• Development Process

Pilots and Prototypes• Ongoing Execution and Further

Development

Our Journey So Far...

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• A New Credit Policy Standardised throughout the function Clarification

• Revised Procedures Manual Interlinked with the Credit Policy Accessible to all Colleagues

• Upload to iConnect• Credit Control Bulls-eye

Credit Policy and Compliance

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Credit Manageme

nt Function

HOW WILL THE CREDIT MANAGEMENT FUNCTION MAKE OUR CUSTOMERS FEEL?

HOW DO WE WANT OUR CUSTOMERS AND COLLEAGUES TO THINK?

PERSONALITY

WHAT WE STAND FORA leading Credit Management Function constantly striving to

better itself. We provide an honest and reliable Credit Management Function with our customers and

other Functions in mind at all times.Valued

Confident

Supported

Satisfied

FriendlyProfession

alReliabl

eUnderstanding

Helpful

They Will Help Me

They Help

Prevent Bad

Debts

They Provide Quality Service

They Take

Pride In Their

Performance

SERVICE•Our staff are helpful, friendly and knowledgeable•We provide an efficient and reliable service

COMMITMENT•We will develop relationships with our customers and branches

PERSONAL TOUCH•We will treat each situation on its own merits•We are people dealing with people

WHAT OUR CUSTOMERS WANT

The Bulls Eye


• Increased 1-2-1’s• Enhanced Performance Reviews• Dedicated Competency Frameworks• New Reward Schemes and Incentives• Improved Training and Development• Bespoke Induction Process

Personal and Professional Development

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Example Competency FrameworksCredit Management

Level 1 Level 2 Level 3

Customer Focus I listen to my customers and empathise with them.I balance customer needs with business needs.I understand the benefit of building a rapport with my customers and colleagues.I deal with customer queries in a polite and professional way and in a timely manner.I ask for help when I can’t resolve a customer query.

I act as a role model by setting clear standards of customer service.I handle complaints quickly and fairly explaining the outcome to the customer.I give help to other team members when queries are escalated to me.I review outstanding queries for the team and ensure action is taken to resolve them.

I communicate the standards for good customer service.I explain and value the needs and expectations of customers.I share information with all relevant parties, to ensure a timely resolution of queries.

Personal Development

I keep my area of expertise up to date.I am aware of Travis Perkins Group’s Credit Management Policy and I follow this in my day to day work.I keep up to date on developments within the business.I ask for, and respond positively to feedback and learn from the work I have done.I contribute to my PDP and I understand the objectives for my role.I aim for a healthy work / home balance.

I lead by example by keeping my area of expertise up to date.I ensure my objectives are in line with the credit management policy.I give feedback in a positive way and recognise good performance.I am confident when communicating at different levels of the business.I give training and advice required to promote team development.I set PDP objectives and conduct reviews on a regular basis.

I coach and mentor individuals to improve their performance and development.I communicate expectations and make sure peoples objectives are in line with the company’s priorities.I encourage my staff to identify their training needs and seek assistance when required.I follow up on PDP’s to ensure objective and development plans are being achieved, offering guidance where necessary.I ensure the credit policy is communicated to stakeholders in the wider business.

Credit Management – Competency Framework

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‘Building Credit Together’


Planning & Management

I prioritise my workload to achieve my goals.I manage my time through effective planning.I manage my workload to ensure that my daily / monthly tasks are completed on time.I understand Travis Perkins Groups Environmental values and I use my resources accordingly. I understand the importance of recovering debts and I adjust my priorities to reflect this.

I help and support my team to achieve the financial goals of the business.I respond to changes to make sure that the team can still successfully manage their workloadI encourage my team to consider the cost and environmental impact of resources.I plan the work rota’s shifts to ensure sufficient cover.

I consider how changes will impact my team.I communicate changes to my team at the appropriate time, considering their workload and priorities.I take responsibility for ensuring my team have the appropriate skills and resources.I identify risks and make stakeholders aware so we can take appropriate action in a timely manner.

Using Information for Communication and Decision Making

I work confidently with the information available when making decisions.I am aware of various sources of information and how to use these to make decisions.I understand where to go and who to involve when making my decisions.I know when decisions should be escalated to a higher level.

I can identify the issue and choose the types of relevant evidence I need to support, alter or reject decisions.I communicate all of my decisions to the relevant people.I review credit limits as and when escalated and ensure credit violations are dealt with.I give guidance to the team on when and how to access additional information.I use my experience and knowledge to help others with their decision making.

I communicate decisions, policies and strategies to my team and any relevant stakeholders.I support my team in their decisions; encourage them to use all information and sources available in order to minimise risk.I act decisively in the interests of the business.

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Working as a Team

I understand the importance of working as a team and being a team player.I value the opinions of others and openly contribute to the team by giving and receiving helpful feedback and sharing knowledge and ideas.I treat everyone with respect and courtesy.I am flexible in my approach and I am willing to adapt as required to accommodate the needs of the team.I take responsibility for my own actions and deliver my commitments to the team.I deal with negativity in a constructive and professional way.

I promote the importance of teamwork to achieve results.I share credit and recognition with the whole team where appropriate.I manage the team and take steps to create a positive working environment.I demonstrate and encourage flexibility within the team.I am open and approachable to everyone and encourage effective communication on all levels.I treat my colleagues fairly and consistently.

I set and communicate clear standards to deliver an effective team.I meet with different departments to share information and best practice.I know when to liaise with different departments when specialist information is required.I build trust through sharing information, knowledge, experience and expertise.I lead my team to ensure they are motivated and engaged.I know when to take action to help improve performance.

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• Customer Service Policy Introduced Accessible as part of the Credit Policy and Procedures Manual

• Customer Surveys and Questionnaires• Utilisation of Hold Music• Out of Hours Management

Message Service Additional options for Out of Hours Payments

Customer Service

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• Collation of Paper Reports• Adaptation of the KRA Screen to report on the Credit

Management Function• Enable Management to Review and Improve team and

Individual Performances Time Saved accessing reports A good starting point for Further Enhancement

• Currently awaiting a project date from IT• Assessing other viable options for Uniformed Reporting

Performance Measurement

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Performance MeasurementKPI’s

DSO Collections Query ResolutionDebtor Days Month on Month Cash targets Month on Month Outstanding Credit NotesYear on Year Year on Year Query by branch/region/divisionCurrent Credit Sales (Cash Vs Sales) Debt Accumulator registered queriesUnallocated Cash Remaining after stop day actioned queries

resolved queries

Prior New Accounts Bad DebtPayment plans Accounts opened Bad debt provisionPrior by branch/controller accounts denied Legal accounts/legal cash

accounts on hold Failures

Risk/WatchSlow Payers Group Top 30Risk Factors Top 30 by brandHi Risk Accounts/watch list Top 30 by regionCredit Violations Top 30 by credit controller

Required to have financial reporting tool showing up-to-date figuresAnd Key Performance Indicators. Recognised Key areas that required reporting on

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Roadmap

3 Months

12 Months and

Beyond

9 Months

6 Months

Credit Policy

Personal and Professional Development

Customer Services

Performance Measurement

1-2-1 and Performance Reviews Initiated

Compliance Process

Future Customer Service Objectives Set

Receiving a Timescale from IT.

Feedback on Functional Audits

All Staff to have Completed A 1-2-1

Benchmarking from Questionnaires

Expand, Educate and Incorporate Targets

Credit Management Road shows

Training and Development Focus

Credit Management Conference

Feedback on Dashboards and development to Live Screens

Review Policy and Benchmarks

Review and Modify Policy

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Corporate Membership Programme

AFFILIATE LEARNER

MICM/MICM(Grad)

FELLOW

AFFILIATE / CORPORATE AFFILIATE

ASSOCIATE AICM

Member Management Training QICM Best Practice

ConferencesMasterclasses

Essential Skills Training

Specialist Training

Corporate Affiliate Briefings ICM Branch events Regional Roadshows

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Recommended TrainingEssential

Essential Skills Recommended for credit management generalists, those working in operational roles or new to credit

Optional Assessment: Level 2 CERTIFICATE

orTWO knowledge units:•Credit Management•Business Environment

‘Cash Collections’ plus THREE skills units Front Office:•Telephone Collections•Negotiation and Influencing• Customer Relations

Back Office:Introduction to Credit Risk Debt Recovery Business Communications & Personal Skills

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Recommended TrainingSpecialist

Specialist

‘Credit Management’ plus ONE of the following paths

Credit Risk Path:• Credit Risk Analysis• Advanced Credit Risk• Financial Analysis

Legal Path:• Business Law• Handling Small Claims• Insolvency and Bankruptcy• ICM Law Conference

Collections Path:• Developing Credit

Management Skills• Team Leadership• Collections Management

Recommended for credit management specialists, managers, supervisors and team leaders

Optional Assessment: Level 3 DIPLOMA AICM

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Other Initiatives The Morning Board

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• M4M (March For Millions)

• Average April Cash Collection = £260M

• Ambitious Aim to Increase of £140M

• A Minimum of 10 Day DSO Reduction

• Business Wide Advertising Strategy

£260M

£400M

The Event... M4M

£300M

£350M

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WHERE AM I TRYING TO GET TO?

THE END GAME

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End Result

We’re Proud

We’re Team

We’reGrowing

We’reValued

We’reprofession

alWe LeadWe add value

• Travis Perkins Credit Academy

• High Engagement

• Qualifications

• Centre of Excellence

• Training centre for Customers

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Challenges

“Nothing is stronger than habit.” (Ovid).

“They always say time changes things, but you actually have to change them yourself.” (A. Warhol).

“Nobody can go back and start a new beginning, but anyone can start today and make a new ending”(Maria Robinson)

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When it goes wrong.

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‘Credit Management Roadmap to Improvement…’

Documents

Transcript of ‘Credit Management Roadmap to Improvement…’