All work and no pay makes wholesale a difficult business

by | Jan 28, 2020 | 0 comments

Businesses are getting better at paying on time, but wholesale distributors still suffer from the late paying habits of their retail customers. According to illion’s recent Late Payments Analysis (September Quarter 2019), the retail sector is the second slowest to pay their bills, paying bills an average of 12 days late. For the wholesale supplier, all work and no pay still rings true.

As a result, sluggish cashflow can be a killer for wholesale distributors. Not surprisingly, the entire supply chain suffers. After all, wholesalers and distributors are a crucial link between manufacturers and retailers.

Approximately 60,000 wholesale businesses in Australia employ nearly half a million people (IBISWorld). Wages alone—an estimated $35 billion—are a huge responsibility. Pressure on profit margins, increasing costs of fuel, and a downturn in economy mean that cashflow is a daily concern.

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It goes without saying that sales are important for cashflow. Collecting payment is equally important. After all, without cash on hand, a business will struggle to pay its bills, provide quality products to customers and invest in growth. Businesses that are determined to get paid on time are leveraging technology to transform their accounts receivable process. Here’s how wholesale distributors use ezyCollect to get paid faster:


Automate the manual tasks


Anthony Bedford is the Financial Controller at Feral Brewing Company and checks cashflow daily. When 40-45 percent of invoices were overdue each month, he identified accounts receivable as a key opportunity to improve cashflow. Anthony considered hiring a credit controller to reduce collection times, but decided that manually following up a large amount of invoices wasn’t going to be effective. “With a large customer base, some with relatively small dollar amounts per invoice, an IT solution was the most cost effective option,” explains Anthony.

Now, automated payment reminders from ezyCollect ensure consistent and regular follow-up of the craft brewery’s hundreds of debtors.


The result: Feral Brewing halved its overdue accounts within the first few months.


Operating capital has improved significantly and this has assisted the cashflows to a more stable level. For a business that checks its cashflow daily, being able to forecast with confidence is another tick in the box.


Ditch generic reminders


“Generic reminders get ignored”, advises Catherine Lander-Graham. Catherine, a credit controller in a mid-sized distribution company, understands the difficulty of managing a steady stream of late payers. Although she could generate a statement from her ERP to her debtors, very few debtors responded with a payment: “The generic nature of the statement meant it was easily ignored.”

Now she customises automated reminders that reach every debtor. “I was able to add the personal touch to every email by using merge fields that automatically added in each debtor’s name, total overdue and even attached copies of invoices and statements. I was communicating with hundreds of customers within an hour, virtually hands-free.”



The result: Within two months, the distribution company cut its overdue invoices by 40 percent, and Catherine’s workload decreased dramatically.



“The reminders were doing their job touching base with so many debtors, with many customers emailing back and apologising that they were so overdue. They even thanked me for the reminders. With the extra time, I was able to get through all the daily credit requests and concentrate on other value adding work.”


Improve debtor visibility


Linda Attenborough is the financial controller at lighting and fan wholesale distributor, Martec Pty Ltd. Linda used to find it difficult to maintain good visibility of overdue debtors. She found herself trying to piece together the complete picture from multiple sources of information. Some accounts aged more than 120 days because the accounts team didn’t have high visibility on ageing invoice data. Nor did they have the time to consistently remind customers to pay.

Now, team Martec use ezyCollect’s system to drive their debtor management process. ezyCollect identifies ageing debtors before they have the chance to become delinquent, so that Linda’s team can follow up proactively. The team has an up-to-date log of all debtor communications in one place and can take decisive action with confidence.

The ezyCollect system consistently issues payment reminders to overdue debtors and automatically attaches a copy of overdue invoices. “It helps debtors, too,” says Linda, who can now be sure her debtors have received the invoice and all the payment information on hand.



The result: Automated reminders save eight hours a day.
From a starting point of 27 percent of accounts overdue, only five percent of MARTEC’s accounts receivables are now overdue.



The keys to better cashflow and productivity


Wholesale distributors, regardless of their product line, can benefit from efficiencies in their invoice-to-cash process. Getting accounts paid on time (with less resources from within the business) brings cashflow and productivity gains.

  • Remind, remind, remind customers to pay. Automate a workflow of polite payment reminders that consistently get your overdue invoices noticed.
  • Manage debtors easily by consolidating all your information into one central source. This becomes your debtor CRM – a single source of truth for the accounts team.
  • Track every invoice to payment. The hundreds of low-value invoices need your attention, too.
  • Collect money securely online. An online payments facility makes it even easier for debtors to settle their account.

For better cashflow in your wholesale distribution business, try ezyCollect’s complete solution for accounts receivable management.


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