The document discusses improving debt management processes through lean six sigma principles. It outlines the current credit control and debt management process, identifying issues like wasted time and costs. A future state process is proposed using automation and digital tools to streamline workflows. A project plan is presented to implement the new system, including identifying required technology, changing business processes, and notifying customers of the updated procedures.

1. Improve the performance of debt management lean / six sigma Optimise- GB

3. What is the process of credit control / debt management This is based on a customer with a 30 day payment term. This is an example - Day 1 is when an invoice is issued Customer accounts may be put on stop (not allowed to place further orders) until the debt is paid. Customers may be put on stop at any time during this process Optimise- GB

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6. Printing invoices before doing anything with them Debts not chased until the end of the month Letter responses from customers Writing similar letters about the same debt Errors in coding of invoices Walking to/from copier, central filing, fax machine Posting invoices & letters to customers Managers having to go through levels of approval before debts are written off Optimise- GB

7. Lean Thinking Any efficiency creating initiative requires a structured approach... Optimise- GB

8. 1. Customer Requirements Credit Control / Debt Collection - All Invoices to be electronically communicated - Speed up the process of collecting debts - Reduce bank charges due to debts not being collected - Reduce postage costs - Reduce Transactional costs of paying suppliers Optimise- GB

9. 2. Current State: Risks & Issues of current process Risks with process Impact of risk Invoices are lost in the post Customers cannot pay invoices that they do not have Credit checks not performed on new customers Known bad payers will constantly pay late, this could be avoided Other issues Impact of issue Invoices being posted back and forth Postage costs eating into profits Optimise- GB

10. 2. Current State: Credit control (Example of non-paying customer) Invoice sent by post 10 Mins process 3 Days to receive invoice Start Here 10 Mins process each call X 3 10 Mins process 10 Mins process 10 Mins process each call X 3 10 Mins process 3 day delivery Letter sent by post 3 Days to receive letter Optimise- GB Accounts (Day 1) 1. Creates Invoice and send to customer Accounts (Day 31) 2. Call customer and ask for payment Accounts (Day 45) 3. Send a letter requesting payment from the customer Accounts (Day 60) 5. Write second letter – chasing debt Accounts (Day 50) 4. Phone customer to chase debt Accounts (Day 90) 6. Send to legal department to chase debt

11. 2. Current State: Credit control / debt management Analysis of time and cost Optimise- GB Process Process Time Waiting Time Labour Cost Postage Costs Total Costs 1. Create invoice and send in post 10 Mins 3 Days £1.70 £0.30 £2.00 2. Call customer and ask for payment 30 Mins 0 Days £5.11 £0.00 £5.11 3. Send a letter requesting payment from the customer 10 Mins 3 Days £1.70 £0.30 £2.00 4. Phone customer to chase debt 30 Mins 0 Days £5.11 £0.00 £5.11 5. Write second letter – chasing debt 10 Mins 3 Days £1.70 £0.30 £2.00 6. Send to legal department to chase debt 10 Mins 0 Days £1.70 £0.00 £1.70 100 Mins 9 Days £17.02 £0.90 £17.92

12. 3. Future State: Credit control – Identify solutions (Example of non-paying customer) Invoice sent by post 10 Mins process 3 Days to receive invoice Start Here 10 Mins process each call X 3 10 Mins process 10 Mins process 10 Mins process each call X 3 10 Mins process 3 day delivery Letter sent by post 3 Days to receive letter Optimise- GB Accounts (Day 1) 1. Creates Invoice and send to customer Accounts (Day 31) 2. Call customer and ask for payment Accounts (Day 45) 3. Send a letter requesting payment from the customer Accounts (Day 60) 5. Write second letter – chasing debt Accounts (Day 50) 4. Phone customer to chase debt Accounts (Day 90) 6. Send to legal department to chase debt Send Invoice by email or put on client access web page Send letter by email or put on client access web page Send letter by email or put on client access web page

13. 3. Future state: New credit control process (Example of non-paying customer) Invoice sent by email 10 Mins process Instant Start Here 0 Mins process 0 Mins process 10 Mins process each call X 3 0 Mins process Email letter Instant 10 Mins process each call X 3 Optimise- GB Accounts (Day 1) 1. Creates Invoice and sends it via email Accounts (Day 31) 2. Call customer and ask for payment Accounts (Day 45) 3. System automatically creates demand for payment letter and sends it by email Accounts (Day 60) 5. System creates 2 nd letter and sends letter by email Accounts (Day 50) 4. Phone customer to chase debt Accounts (Day 90) 6. System notifies legal department to chase debt

14. 3. Future State: Credit control / debt management Analysis of time and cost Optimise- GB Process Process Time Waiting Time Labour Cost 1. Creates Invoice, saves and send it via email 10 Mins 0 Days £1.70 2. Call customer and ask for payment 30 Mins 0 Days £5.11 3. System automatically creates demand for payment letter and sends it by email 0 Mins 0 Days £0.00 4. Phone customer to chase debt 30 Mins 0 Days £5.11 5. System creates 2 nd letter and sends letter by email 0 Mins 0 Days £0.00 6. System notifies legal department to chase debt 0 Mins 0 Days £0.00 50 Mins 0 Days £11.92

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16. 4. Project Plan (simplified) Optimise- GB What When by Who Identify new system to automate letters and create workflow processes 30 th June Credit Control / IT Change business processes per 3: Future state process 31 st July Internal Audit Set up access to web servers that lists all customer invoices, viewable by only appropriate customers 30 th August IT Request all customers to correspond by email and provide them with access to web server so that they can see their invoices online 30 th August Credit Control