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Gold AHA Award Winner for Working Capital Management

HENKEL OF AMERICA INC.

By Staff Writer | Updated on November 03, 2008

The looming recession puts a premium on the ability to collect receivables efficiently and aggressively, and Henkel of America Inc. is well positioned to collect that premium, thanks to a program that outsourced nearly all direct collection work to a service center in Manila and automated the process with SunGard’s GetPaid receivables solution software. The move has reduced past-due accounts from 13%-14% of Henkel’s 30,000 business customers to just 8% currently and shaved about five days off DSO, reports Scott Miller, vice president of finance at the maker of industrial adhesives, home care products and cosmetics. “We’re measured by our past-due percentages, and right now we’re looking pretty good,” he says. Terms are net 30 for about 85% of Henkel’s customers, and accounts are classified as past-due on day 31.

If the economy deteriorates, Henkel is positioned to move quickly. “If we decide we need to tighten our credit policies or collection procedures, we can change systems settings in an hour, and they would be effective the next day,” he says. Henkel has competition in most markets but often enjoys preferred vendor status that gives the company leverage to “drive the payment behavior of our customers to meet our expectations,” he says. Henkel has $6 billion of annual sales in North America alone. Most payments arrive by check.

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