Deciding to outsource can be a tough decision for many companies. PUMA, the sport lifestyle company, had strong evidence it was time to stop doing things in house: A customer told the billing department he hated PUMA’s invoices.
“The customer sent us a letter telling us whoever designed our invoices should be fired. We realized we weren’t the experts. We had to do something because our customers expected us to be easy to do business with,” recalls Brian Good, director of outsourced relationships.
Customer satisfaction, however, was only one reason the company raced to outsource. PUMA, which develops footwear, apparel and accessories, also wanted to:
- Move to electronic invoicing using email.
- Personalize the invoices.
- Save money (natch). The goal: reduce costs by 25 percent.
Billtrust, the outsourcing provider PUMA selected in a sole sourcing, got the company’s two brands–PUMA and Tretorn–up and running in just 90 days. And it was just in time. Six months later PUMA purchased Cobra Golf, another athletic goods manufacturer. Billtrust was able to take over the new acquisition’s invoicing in less than 60 days, integrating the new company in record time.
“A lot of our customers acquire companies,” says Mitch Rose, VP Marketing, Billtrust. “So it’s a relatively simple project for us. That’s a big advantage of outsourcing.”
Today Cobra PUMA Golf has 10,000 active clients. Tretorn has 500 active clients, and PUMA has 2,500. Billtrust can send up to 5,000 invoices for PUMA a day with no issues.
PUMA, which “starts with sport and ends in fashion,” now no longer has to wait for the United States Postal Service (USPS) to deliver its invoices or its money. “It was taking a long time to get their bills to the customers,” observes Rose. The USPS “keeps raising rates and cutting service,” he reports. “For that reason, PUMA needed to embrace online technology,” the Billtrust executive continues.
Another drag on delivery was that PUMA was mailing its invoices from its corporate headquarters in Massachusetts. “But PUMA sells its products all over the world,” says Rose.
Billtrust now mails PUMA’s bills from eight facilities, depending on the recipient’s ZIP or country code. The service provider mails the bills for Florida customers from Florida, for example. “This speeds up getting the bills to the customers,” Rose continues.
The quicker turnaround cut 10 days from days sales outstanding (DSO) in the first six months, Good reports. “Our customers don’t want to pay us faster. It’s just easier to pay us now,” he explains.
PUMA employees in the finance department no longer spend their time making copies of invoices for customers who misplaced them, because now the customers can just log into the personalized portal and find the errant invoice themselves. “Instead, our team is making collection calls,” which is more valuable work, says Good.
The Billtrust solution also has a collection tool. PUMA can click on a button that automatically sends copies of the relevant invoices as well as the collection letter. “Billtrust took this suggestion and built it for us,” says the PUMA executive.
Now PUMA has the ability to add marketing messages to the invoices. Good says today PUMA customers are constantly learning about its new products through its invoices. “Employees at our smaller customers do more than one job. Many people paying the invoices are also part of the buying team or even the owners. The marketing message is creating an unexpected tail wind,” Good explains.
How the process works
As soon as a product leaves the warehouse, PUMA automatically SFTPs the information to Billtrust. The service provider then sends an invoice to the customer—ranging from mega buyers like Footlocker to small mom and pop retailers—in the form they prefer. The menu includes fax, email or snail mail.
Every customer can log into the PUMA payment portal. The portal has an online payment tool; customers can pay by credit card or ACH. Each invoice has its own URL and password. Customers can see which invoices remain open. They can print them if they need a hard copy. Historical records are available, too, up to one year back.
The initial customer challenge was to switch customers from paper to electronic invoicing. There wasn’t a race to change. So Billtrust started making calls to increase conversion. The conversation rate went from 30 percent to 40 percent in a month, Good reports. Rose says the final goal is 70 percent. “Electronic invoices are the future of billing,” he says.
The initial internal challenge was IT-related. PUMA’s IT department had to send Billtrust an open balance file every day. “We really needed IT’s support,” Good says.
Why this relationship works
Rose says a key characteristic is that PUMA has “a leader with vision. Brian understood where PUMA was and where he wanted to go.” Rose praises him and PUMA’s IT team “for getting us the assets we needed” and being able to work as a team, regardless of who was the employer. “Brian had the requisite cross-functional skills,” he adds.
Rose says the PUMA relationship presents a paradigm for process transformation. “We set clearly defined goals, then exceeded them,” he notes.