Now salespeople enter sales figures directly into the customer's file in the contact-management software program ACT!, which they all have running on their Toshiba laptops. Reece himself did the programming that embedded an Excel template in Microsoft Word into ACT! so that the cost analysis is performed within the customer file. The numbers are then automatically imported into a sales-quote template. After the salesperson delivers the quote to the client, it's E-mailed to Reece. As Reece opens the E-mail message, a copy of the quote is automatically transferred and cataloged in a central database. Reece worked primarily on his own to set up the procedure, noting, "I just read the manual until the cover came off."
There used to be trouble managing accounts receivable, as well. Every so often, the billing department would pull a list of derelict customers from the system and mail their names to a collection agency. Now, once a month, as customer invoices are generated, the computer also produces a list of those customers who haven't paid their bills in 35, 45, or 55 days, and prints out one of three different dunning letters.
Marketing benefits, too. Daley generates long mailing or faxing lists based on any criterion he chooses. For example, at the end of the year, he pulls out the names of rental customers and faxes them a letter listing the benefits of owning. In the spring he faxes those who haven't had a coolant change in more than six months and warns them that their forklifts might overheat during the hot summer days.
As for inventory, Reece and Daley cut equipment inventory 50% last year, to $1.8 million. Combined with steady sales growth, that has contributed to a 33% increase in the company's overall return on assets. Reece remains highly leveraged, and by the end of 1996 the company waited an average of 55 days to get paid. But that figure is down from 57 days in 1995.
Citicorp acts like a proud parent. Hilton recently traveled to Orlando to honor Reece and Daley with the 1996 Distinguished Dealer Award. Reece returns the favor by acknowledging Citicorp's role in his company's technology-driven turnaround. "Citicorp pushed us into the pool," he says. Many small-business owners have uttered similar words about their bankers, but Reece means it in a nice way.
Joshua Macht (josh.macht@inc.com) is an associate editor at Inc. Technology.
Expert Opinion
Not every bank has a formal process for auditing a company's computer systems, as Citicorp does. But most look for a certain level of automation when considering a company for a loan. Here are the thoughts of two other major commercial lenders on the importance of technology for companies seeking loans.
| Ken Coopman is an executive vice-president for the Bank of America's Southern California commercial-banking division, in Los Angeles. He makes commercial loans of $2 million to $100 million.
"The days of auditors' finding handwritten ledgers are gone. Even though we do not have a formal technology-systems auditing process when we enter the company, we want to make sure that we finish the due-diligence process feeling comfortable with a company's automation level. The better clients utilize information technology, the more confidence we have in their systems, and the fewer times we have to audit their books each year. That saves time and money for both parties.
"But it's not just the confidence factor. In the near future we will begin to exchange data with our clients electronically. It's likely that we'll soon move toward having our clients report to us on-line rather than mail us a borrowing certificate each month. It just makes sense from a cost perspective." |
Paul Watson is vice-chairman of Wells Fargo and runs the Southern California office, in Los Angeles. He oversees financing deals for the commercial-banking group, with companies ranging from $10 million to $500 million in net sales.
"We shy away from doing deals with the hip-pocket operators of the past--meaning the guys who kept all their numbers on a small piece of paper in their pants pocket. We have teams of auditors who look at potential clients from all different angles. One team might do what we call a forensic evaluation of the company's automated systems.
"But with the small to midsize companies we have no cookie-cutter solution for how we inspect their technological capabilities. For example, if we are lending to a beer distributor, we want to make sure that it has the proper systems to accurately control inventory. But if we are lending to an agricultural company, we'll want to make sure it has systems for generating crop-rotation data, and we may want that information to be made available to us on-line. Technology isn't quite at the top of the list of loan criteria, but it's quickly rising." |
