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In our seventeenth series Jill Acheson talks to
David Malone founder of CashCollector, about his business’ crux at present. Later in the year we
re-visit each entrepreneur for a progress update.
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| David Malone, CEO of CashCollector |
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Business Name: CashCollector |
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Year of Set Up: 2004 |
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Founders: David Malone |
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Location: Dublin, Ireland |
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Business Type: Software Development |
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Background
CashCollector is a cashflow management software and services company launched in Dublin in June 2006. The software was developed as an innovative solution for any company that sells on credit to improve its cash flow and reduce its costs by automating the invoicing and accounts receivable process.
The web-based system ensures any company using CashCollector gets its invoices paid sooner, which is a huge benefit in any business. The CashCollector software optimises the ‘invoice-to-payment’ process by providing electronic invoice and statement presentment. Our unique innovation is chasing payment by functioning as a Virtual Credit Controller, where every debtor is contacted by email, fax or print on the first day an invoice becomes due for payment. It is a first party solution with customers believing they are in a direct conversation with the credit controller. The company personalises all communications, to automatically escalate the tone of the communications for payments that are not received.
Current Status
CashCollector has been exceptionally well received by Irish businesses with clients which include Golden Pages, Eircom Business Systems and Imagine Broadband. These clients have been delighted with the results they have achieved using the software, as evidenced by the feedback from Golden Pages. “We had over €300,000 of debt outstanding for over seven months. Our traditional methods of collection had not worked. Amazingly, we recovered €120,000 after just three weeks using CashCollector software. This was a massive return on investment for us. Now, we use CashCollector for all our cashflow management,” says Jim Meagher, Credit Control Manager with Golden Pages Ireland.
In our own opinion, the three biggest mistakes CashCollector has made so far was an under-estimation of the total development time for the application development, waiting until only recently to employ local sales and marketing personnel in the USA, which is our key market and finally, setting an exceptionally high level specification before launching the product, including features such as multi-lingual capability, which added a great deal of complexity to the product, and again slowed it’s development.
Financing
Our Angel round of funding completed in July 2006, was funded by the principals of the business and matched with funds from Enterprise Ireland’s ‘High Potential Start-up’ investment programme. Our second and current round of funding is underway and is being promoted by Berkeley International Group PLC.
Expansion
CashCollector is rapidly expanding in Ireland, the UK, Germany and the USA and has plans to recruit significant additional sales resources in each market to firmly establish our first-mover advantage. CashCollector are about to launch several marketing and advertising campaigns nationwide to drive awareness of the business benefits that our software delivers.
Future Plans
CashCollector is an ambitious company with global aspirations to effectively become the CRM tool of Credit Controllers worldwide. Our goal is to dominate customer account management as the most effective cashflow management software solution available.
Crux of the Matter
CashCollector is an entirely new concept for Irish companies to grasp. The traditional accounts receivable process involved repeated phone calls by credit controllers to chase payment from their customers, followed by re-sending invoices when requested. Although this would eventually secure payment, it is an expensive outdated approach, and very time-consuming. Even the most efficient credit controllers rarely manage to contact all of their customers as soon as they should to secure payment.
The crux of the matter for CashCollector currently is how we can most effectively market the business and sell the benefits of such a revolutionary software solution to all the stakeholders involved. Senior business managers rarely have time to consider new solutions, while accountants and credit controllers are usually extremely cautious by nature, and reluctant to recommend new software solutions that would require them to change their processes.
QUESTIONS FROM CASHCOLLECTOR TO THE PANEL:
- What would you recommend as key sales/marketing activities for an Irish cashflow management software company in its home market in the year of product launch?
- As sales are the lifeblood of any business, what is the most effective way to find, motivate and retain key personnel in such a competitive global market?
- We recognise the critical importance of rapid and effective entry into the USA as a key market. What sales, marketing and distribution strategies would you recommend for such a competitive marketplace for an Irish software company such as CashCollector?
Kevin Sheehan, Partner, SME Services, Deloitte, heads up the panel
of experts below who give their advice on how best CREMe Softeare Ltd can grow their business.
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| Kevin Sheehan, Partner, SME Services, Deloitte. |
CashCollector will need a dedicated and motivated sales team to secure growth revenues. Such people are hard to find. The directors should consider what they are prepared to offer quality candidates to join the team. Incentives will have to form part of the overall package and the directors can use any of the widely used incentive based benefits including share options, phantom shares, profit sharing schemes etc.
US PENETRATION
The US is a large continent to cover, and many a firm has burnt huge cash resources trying to penetrate the market and have achieved little. I believe that there are two potential options if sustainable growth is to be achieved.
If rapid penetration is required, the best way forward is to find a strategic partner with a US marketing and distribution channel already in place for their own complementary software products, and negotiate a sensible distribution agreement.
Alternatively, a lower key approach is to start small and enter each region through the existing employee base. This is a hard sell and will take time, but will be less costly and ensure that CashCollector is fully in control of the product and its growth.
Whatever option is chosen, a full cost and benefit analysis should support the ultimate decision.
Kevin Sheehan, Partner, SME Services, Deloitte.
Head of Panel for Crux of The Matter.
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| Brian O’Kane, Managing Director, OAKTREE
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Since even the most basic article on credit control emphasises the need for a systematic approach, CashCollector should waste no time on customers who remain unconvinced or unwilling to implement a system for cash collection. This should be CashCollector’s first line of qualification of customers. Time and money are too short to spend on educating customers; find, and go with customers who already know they need and want your product!
PREVENTION OR REMEDY
CashCollector also needs to decide whether it is offering prevention or a remedy. It highlights Golden Page’s recovery of €120k in just three weeks, but this is solving a problem, remedial action. The real, much bigger benefit, though harder to quantify, comes in preventing €300k in unpaid debts building up in the first place.
DOMINATE
Word-of-mouth and referral is key to growth in this market. Find well-known names, get them to use the software (free if necessary), and leverage their success. Make it easy for people to buy by reducing the complexity of different versions, software and services, currently being offered. Pick a niche, dominate it fast by offering what that niche wants, and move on to the next. CashCollector aims to simplify cash collection but also needs to simplify its own customer acquisition.
Brian O’Kane, Managing Director, OAKTREE Press
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| Ann Murtagh, Business Strategist, AIB |
An Irish company, such as CashCollector, should try to establish a skilled and experienced sales team with ambitious but realistic targets. You need to develop a detailed and fully costed marketing plan, as well as develop relationships and agreements with key industry and business groups.
DEVELOPING CONTACTS
You should develop your contacts with established and developed bodies such as the Chamber of Commerce, Small Firms Association, Irish Small and Medium Enterprise and your local County and City Enterprise Boards. This will help you develop your business strategy. Customer testimonials should also be used in advertisements and brochure-ware to help show the benefits of what CashCollector has to offer.
HEAD HUNTING
There are a number of ways that CashCollector could source personnel. As an ambitious business with international plans, CashCollector could head-hunt key personnel from other businesses, use their own website as a means of attracting potential candidates and for the application process, use employment agencies, search online databases, or finally, ask existing employees for potential candidates.
Ann Murtagh, Business Strategist, AIB
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| Mark Fielding, Chief Executive, ISME |
Dealing with conservative, prudent, non-risk taking accountants requires a sales technique and approach that includes the patience of Job and the optimism of Pollyanna; yet that is where the market is for CashCollector.
POWER OF THE STRATEGY
No amount of demonstrations and glossy brochures will beat the endorsement of a number of peers and this is where Malone and his team must concentrate their efforts in the struggle to establish first-mover advantage. However, the first-mover mantra in itself means nothing, as the first team to execute a stupid idea has accomplished nothing. What really matters is the power of the strategy employed and the protection of the intellectual property of CashCollector, as new technology that cannot be protected is worthless.
BRAND BUILDING
The core strategy must centre on the building of the brand, while expensive to construct and maintain will in the long run guarantee uptake by accountants who are, in the main, brand tarts, happiest in a crowd of like minded professionals, using similar software, proven and tested. Once the brand becomes known, the battle is half won and the extra initial expense in the high level specification will begin to bear fruit in the marketplace.
Mark Fielding, Chief Executive, ISME |
ABOUT CASHCOLLECTOR
1. CashCollector software links into your existing accounting system and presents invoices and statements electronically.
2. When client invoices become overdue, it automatically steps in to communicate in a personal manner with your customers.
3. CashCollector makes your customers feel like they are in a one-to-one conversation with your credit control staff, which will result in them paying sooner than they do now.
4. There are four CashCollector editions to choose from, so that when your business grows, you can choose a higher level of the software.
5. The benefits of using the software include fewer billing queries, cheaper invoice delivery, a drop in collection agency fees as well as lower collection costs.
If you would like a chance to feature in Irish Entrepreneur's 'Crux of
The Matter', then all you have to do is email us with your full contact
details to cruxofthematter@irishentrepreneur.com
and we will be in touch. |
