1. Robert S. Shultz Partner, Quote to Cash Solutions (Q2C) rshultz@quotetocash.com www.quotetocash.com

2. Consulting firm focused on improving clients liquidity focusing on: The quote to cash process, policies and procedures Organization: Staff deployment and alignment Credit, collection and dispute management system tools Customized skills development and training Expert witness support in bankruptcy and collection litigation cases 2 Quote to Cash Solutions All Rights Reserved 2009

3. Determining what is ripe for automation in Your company. Justifying the cost Selecting a vendor Getting Started: Steps to an effective implementation What can be gained through credit, collections and dispute management automation 3Quote to Cash Solutions All Rights Reserved 2009

4. Where is the Pain? What is the potential ROI? Who needs to be involved? What solution is best: Outsource? Software tools? What can we afford to do? or… What can we not afford to ignore? 4Quote to Cash Solutions All Rights Reserved 2009

5. Proactive management of credit risk, cash application, collections and dispute management? Use meaningful KPIs and meet or exceed expectations? Have effective workflow integration, performance efficiency and staff productivity? Able to analyze and report customer and portfolio risks and revenue opportunities? Insure compliance with regulatory requirements? Provide the root cause information needed to lead process improvement efforts? Serve as a valuable resource to internal stakeholders and customers? 5Quote to Cash Solutions All Rights Reserved 2009

6. Process Inputs Process Outputs 6 Credit/Collections Cash Application Dispute Management Customers Sales Internal Stakeholders Senior Management Customers Sales Internal Stakeholders Senior Management Audit Quote to Cash Solutions All Rights Reserved 2009

7. Does your project fit within the overall systems strategy of your company? The simple compelling need? What implementation costs, staff resources and turnaround time will management support? Will you be overlaying automation on broken processes? Regardless of costs, are there control issues that must be addressed to meet regulatory requirements? 7Quote to Cash Solutions All Rights Reserved 2009

8. No system is perfect Tactical reality vs. a Strategic long term initiative Incremental improvements in a short time-frame It is all in the ROI Will it pay for itself? ERP vs. Third Party….Do a gap analysis You may be surprised 8Quote to Cash Solutions All Rights Reserved 2009

9. Credit, Collections and Cash Application Customer Management: -Order hold/release- Bill Presentment Process Management: - Deductions Management- Integrated Workflows - Document access, archiving and retrieval Reporting and dynamic dashboard options: - Key Performance Indicators -Performance Tracking Self service access to information and documents by inside stakeholders and customers 9Quote to Cash Solutions All Rights Reserved 2009

10. Costs Internal IT and other staff resources: Pre and post implementation Software License, maintenance and training Equipment Savings/Benefits Increased Liquidity through DSO reduction: Reduced need for borrowing Annual cost of funds savings Increase in Staff Productivity Process Improvement and Reduced Dilution Reduction in Bad debts Intangible benefits: Better customer care Competitiveness Compliance 10 Quote to Cash Solutions All Rights Reserved 2009

11. 11 Year 1Year 2Year 3 Annual Revenue $ $ $ Net Receivables $ $ $ Annual Deductions $ $ $ Receivables Interest Rate % % % Net Receivables Reduction % % % Deduction Recovery Improvement % % % Bad Debt Avoidance Improvement % % % Project Benefits Net Receivables $ $ $ Interest Cost of Net Receivables $ $ $ Value of Net Receivables Reductions * $ $ $ Headcount Avoided - - - Burdened Labor Rate = $xxK/Annum $ $ $ Value of Labor Savings $ - Annual Deductions $ $ $ Value of Deductions Improvement** $ $ $ Value of Bad Debt Avoided $ - Annual Benefits $ $ $ *Interest rate * % improvement/degradation * AR balance **Recovery rate % * yearly deductions ROI Worksheet Template ROI Worksheet Template Quote to Cash Solutions All Rights Reserved 2009

12. Get strong Senior Management support Appoint a Project Leader with a vested interest The functional manager should not relinquish a leadership role Create a team of stakeholders Establish a list of needs and set priorities Prepare a Request for Proposal (RFP) Evaluate options 12Quote to Cash Solutions All Rights Reserved 2009

13. You can customize your current ERP A third party software provider that integrates with your ERP Software as a Service (SAAS) Outsource or In-Source The key is to determine what best fits your companys needs and reality 13Quote to Cash Solutions All Rights Reserved 2009

14. Provide an overview of your business List your functional needs Ask the vendor specific questions relevant to your needs Do your due diligence Be clear on the form and timing of the response Invite a short list of vendors to answer questions and demonstrate their product. Ask for your data in the demo. 14Quote to Cash Solutions All Rights Reserved 2009

15. Dont fall in love with technology just because it exists Look at vendors that will service what YOU need Get references from companies similar in industry and size. Ask: What level of support did the vendor provide pre and post implementation? How effective was the training? How do users feel about the product? Is it user friendly? 15Quote to Cash Solutions All Rights Reserved 2009

16. They focus on issues you are trying to resolve on a full-time basis. Credit and collections is not an after-thought, it is their market and revenue stream. They spend R&D dollars to improve their product based on user needs. User groups you can relate to, who have a real impact on the next release. Implementations are easier and of shorter duration. 16Quote to Cash Solutions All Rights Reserved 2009

17. 17 Poor leadership from top management Automating existing redundant or non-value-added processes Attempts to heavily customize an Off the Shelf product Unrealistic timetable: Working backwards from a drop dead completion date. An unrealistic expectations, too broad a scope Poor project management Inadequate IT resources Does not address the companys strategic marketing or financial strategies Inadequate education and training People try to maintain the status quo Inadequate testing Flawed data migration Forget that the project is for the users, not IT Top Reasons Why Projects Fail: Quote to Cash Solutions All Rights Reserved 2009

18. A consistent approach to credit approval and review Integrate the order entry/billing process Integrate cash application A structured approach to collections Leverage deduction management as a road map to improve root cause visibility and processes 18Quote to Cash Solutions All Rights Reserved 2009

19. Determining credit risk boils down to two concerns: 1.The risk of payment being delayed beyond trade terms 2.The risk of non-payment Automation can bring visibility: o Determine the real risk o Helps defend decisions based on facts 19Quote to Cash Solutions All Rights Reserved 2009

20. Meets the need for speed Consistency, predictability and fairness Quality credit decisions with reduced resources The credit manager becomes the Go To person Actionable and timely information and management reporting Quantify the basis for decisions and the perceived risk Extend credit based on strategic company goals 20Quote to Cash Solutions All Rights Reserved 2009

21. Based on financial and payment history you can manage: o New account approval o Transaction approval o Easy access to customer and portfolio risks and trends o Ability to segment the portfolio: Family tree, risk, industry, sales territory etc. 21Quote to Cash Solutions All Rights Reserved 2009

22. o Credit and collections policies o Marketing and sales strategies o Cash forecasting o Bad debt calculations 22Quote to Cash Solutions All Rights Reserved 2009

23. The score is driven by the credit policy The credit policy is agreed to up front by all areas affected It is critical to get senior management endorsement up front 23Quote to Cash Solutions All Rights Reserved 2009

24. Catch errors and correct them quickly Credit holds and releases: Control risk exposures at the points of order taking and shipment authorization Understand root causes for disputes and exceptions to drive process improvements 24Quote to Cash Solutions All Rights Reserved 2009

25. Take advantage of data on remittance detail in what ever form it is received Every deduction tells a story Develop an automated dispute workflow process Use information gathered as agenda topics for cross-functional process improvement efforts 25Quote to Cash Solutions All Rights Reserved 2009

26. Collections is not an accounting function it requires Actionable up to date information Ability to prioritize contacts, automate workflow to a resolver and escalate when necessary Ability to track contact notes and follow-ups Match payments and credits to open debits 26Quote to Cash Solutions All Rights Reserved 2009

27. Flexible assignment of accounts to a collector or reconciliation analyst User defined collection strategies based on a customers level of risk and payment habits Daily prompting of collection contacts Pre-defined contact notes to reduce keystrokes Flexible contact options: Phone, or customizable fax, email or letter Reason code driven workflow and tracking User defined escalation and turnaround policies Track and report key performance indicators Drill down capability Minimal key strokes to get to the information needed 27Quote to Cash Solutions All Rights Reserved 2009

28. Track historical information: Customer payment history, disputes by type, status, time taken from identification to resolution and broken promises Track customers at every level of the family tree Access to account information and obtain copies of documents by internal stakeholders and customers A dashboard and robust management reporting tools Ability to integrate document archiving and retrieval in to the cash application, collections and account reconciliation process Instant access to documents Auto-dial capability for high volume collections Ability to forecast cash Self service by internal stakeholders and customers 28Quote to Cash Solutions All Rights Reserved 2009

29. 29 Result: Increase the value of the credit collections functions Automation investments can pay for themselves Arbitrary decisions = A thing of the past Simultaneously analyze multiple credit variables Everyone knows the special requirements up front Easier to explain and defend difficult decisions Efficient collection practices = Cash Reduction in disputes and bad debts= Lower costs Visibility to root cause issues=Improved efficiency and process improvements Quote to Cash Solutions All Rights Reserved 2009

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31. Robert S. Shultz Partner, Quote to Cash Solutions (Q2C) rshultz@quotetocash.com www.quotetocash.com