CentraFin, a company providing specialised financial solutions, is a division of the South African-based CentraTel Group of companies. The group focuses on the value-added distribution of voice, convergence and data products throughout sub-Saharan Africa and has three distinct areas of focus: distribution, resale of airtime and specialised financing.
It is into this specialised financing area that CentraFin falls and is a natural fit within the largest multi-vendor telecommunications distributor in sub-Saharan Africa.
CentraFin offers a financial solution to the group`s clients wishing to rent PBX products.
CentraFin`s unique offering provides competitive, flexible rental options to customers that cannot be serviced by the traditional finance houses or those wishing to keep their investment in communications and IT solutions off the balance sheet. Further to that CentraFin speeds up the approval process by offering a unique "One Page" finance agreement document providing their customers with peace of mind.
CentraFin`s rental scheme has been adapted to provide finance solutions that are superior to existing PBX schemes by tailor-making customer-specific solutions that are flexible and ensure a high degree of customer satisfaction.
CentraFin typically provides finance solutions to blue-chip and large corporate companies as well as to the SME that might not have any credit history or references. Even though CentraFin`s natural bias is toward telecommunication equipment, it also provides financing for complementary goods and services forming a vital part in CentraTel`s group of companies.
The challenge
After a huge growth spurt, CentraFin was operating a R50 million book without a financial system in place. There were a number of challenges that CentraFin was faced with, including:
* CentraFin`s operation at that time was manual and paper-intensive, creating a situation where deal information was often lost.
* Where deals were discounted with other financial institutions CentraFin was unable to `shadow` or `mirror` these discounted deals. As a result, CentraFin could not track discounted deal expiry and/or settlement.
* The manual process meant that there was a possibility of clerical errors occurring such as the duplication of data and data capture errors.
* There was no integration with the Core General Ledger system - Great Plains.
* CentraFin was unable to track deals through their lifecycles and as a result was unable to control deal payouts. It was also difficult for the company to apply a stringent credit vetting process.
* Debit order collection runs were problematic and resulted in rentals not been collected on time.
* A lack of accurate and reliable operational and management reporting.
All of these challenges resulted in:
* CentraFin`s customers became increasingly frustrated due to the lack of information and poor service.
* The CentraFin staff were frustrated and could not operate efficiently.
* The accounting information was outdated and incorrect.
* Decisions were made based on inaccurate and outdated information.
* An inability to monitor both staff and business unit performance
* A possibility of financing deals that were excessively risky.
* A disproportionate growth of the debtors book in comparison to the new business obtained.
* Slow collections and a lack of cash.
* Low profitability.
It was as a result of these challenges that CentraFin recognised the need to acquire a solution to efficiently administer and control its entire business.
The solution
After an extensive selection process, CentraFin selected Xpertek`s Acquire Loan Finance Solution as it addressed the challenges, identified above, in the following manner:
* Acquire is a fully integrated, parametised, flexible, modular loan finance solution. Acquire automated CentraFin`s operations by providing a single, customer-centric solution. All deal information including documents such as customer agreements are stored electronically within the system. This prevents the likelihood of deal information being lost and reduces the reliance on paper-based documents.
* Acquire enabled CentraFin to `shadow/mirror` all deals that were discounted with other financial institutions. This means that CentraFin is able to monitor deal expiry and deal settlement and is therefore able to benefit from the secondary rental phase of a deal in terms of increased rental revenue and potential upgrade marketing opportunities. CentraFin is also able to provide its customers with settlement quotations.
* All deal information captured in Acquire is captured once only. This eliminates data duplication and reduces the risk of error. Furthermore, Acquire is a `rules-based` system, which means the system will ensure captured deals meet the profile of the customer and falls within the customer`s limit facility. Financial products may be set up within the system to simplify and control the quotation process by supplying default values and restricting the choice of values available to the user.
* Acquire is a flexible solution which conforms to open-architecture standards. All accounting entries, relating to any deal set up within Acquire, are accounted for in the Acquire Sub-ledger. Acquire interfaced with Great Plains and updated Great Plains with the necessary accounting entries.
* CentraFin are now able to track deals from quotation stage, to payout and ultimately settlement or collection, thereby allowing the company to monitor the progress of the client`s deals throughout the lifecycle. This reduces CentraFin`s risk of bad debt, increases their ability to sell new rentals and improves customer service.
* CentraFin`s Acquire system automatically generates a debit order file which interfaces with Nedinform for the processing of automated debit orders. Furthermore, delinquency periods and behaviours may be defined according to the requirements of the client. This enables CentraFin to be proactive in the control of potential bad debt. All of this ensures efficient collection of rentals due and improved cash flow.
* In addition to the standard report library within Acquire, customer-specific documents and reports can be created and maintained by CentraFin using the built-in report writer. Reports may be saved, printed and imported into spreadsheets for further manipulation and analysis. Documents are automatically linked to the customer or deal to which they relate for improved customer relationship management. Faxed, scanned and e-mail documents may also be attached to customer records in order to minimise the storage and retrieval of paper records.
The benefits
Acquire has empowered CentraFin staff to operate efficiently and provide excellent service to customers. Deal turnaround times have been reduced, increasing sales revenue. Management can now make informed decisions based on reliable, up-to-date information. Reporting on performance of the various business units is readily available and easy to monitor. The debtors book is now proactively managed, increasing the efficiency of the collections department.
Discounted deals are tracked and secondary rental and/or upgrade opportunities identified at an early stage.
Xpertek began the project on 18 January 2005 and the system went live on 11 April. This meant that within less than three months, CentraFin benefited from the solution and have since grown the book, providing a significant return on investment.
CentraFin now operates a more profitable, efficient business.
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