Case Study: Ferrero USA

Ferrero SpA is an Italian founded and headquartered family-owned confectionery company. The company is one of the top five confectionery companies worldwide with annual sales in excess of EUR 4.4 Billion. In the United States, the company is well known for its market leading Tic Tacs® breath mints and Rocher Hazelnut Chocolates® brands. These products are widely distributed through the United States’ largest retailers.

Challenge Prior to implementing Cforia Software, Ferrero USA had a good DSO number of 27 days, which was attributed to a 2% cash discount to customers who pay within 10 days of receipt of goods. A bigger problem for Ferrero USA was numerous deductions taken by large retailers. Mining inappropriate deductions was further complicated by a distribution channel that has brokers originating 40% of the overall sales volume. Before automating with Cforia’s solution, numerous manual methods including Outlook Calendars, Post-It Notes, aging reports and Excel spreadsheets were used to manage a Collection Agent’s day. Follow up correspondence was done only for extreme cases using Microsoft Word Templates and a fax machine. The majority of a Collection Agent’s day was spent leaving messages for creditors and sending multiple forms of communication internally in order to resolve deduction issues. Solution Cforia Software’s MC2/MD2 collection/deduction platform was purchased by Ferrero during 2004. Ferrero quickly began using the MD2 Deductions Web Portal as a tool to collaborate with key account managers and brokers on working specific deductions within the system. The portal allowed claims analysts to share deductions information with outside parties and improve visibility in successfully resolving each issue. Within the portal, analysts, account managers and brokers had the ability to maintain notes, email back and forth and download deductions to Excel for offline work. This greatly improved efficiency in managing deduction workflows. With the web portal serving up information for brokers to view, it allowed collectors to focus on the non-disputed, “clean” A/R. The A/R Workbench gave collectors and analysts further control over their work days in terms of prioritization. Having the ability to assign reason codes and invoice types allowed users to work their portfolios accordingly.

“Cforia’s Deduction Collaboration Portal enables our team to work with direct sales and brokers who are onsite with our customers They are able to verify compliance with tradefund promotions. Since going live with Cforia, we have been able to collect an average of $2.1 million in invalid deductions per year, for the past 5 years.” Ferrero USA

Key Benefits:

• Reduction of DDO from over 90 days to less than 30 days within 3 years

• Maintained staffing levels with 30% increase in deduction volume

• Average $2.1 million collections of invalid deductions per year, the past 5 years

Key Features of the Solution are:

• Initial Near Real-Time Integration using Cforia’s SAP Certified Connector

• Integrations with email and fax servers• MD2 Deduction Portal which provided deduction and account

information to key account managers and brokers• Consolidated data within both the A/R Workbench and MD2 Portal

was key in improved visibility and quicker deduction resolution• Assign deduction codes and invoice types for analyst prioritization• Assign analysts based on broker ID so that one internal person

manages all the items for a broker

About Cforia Software Cforia Software is a global company company that provides leadingOrder to Cash Automation that is used to manage over $200 Billionin yearly A/R. Our rapid growth is driven by superior technology thatincludes near real-time integration across multiple ERP systems, currencies, languages and business units. Cforia Data Integration Connectors facilitate rapid real-time integration within your corporation’s existing IT infrastructure including ERP systems, document imaging, third party credit data, email and facsimile servers. Pre-packaged data integration connectors greatly shorten project timingand risk by avoiding custom data integration.

Case Study: Ferrero USA

Key Benefits:

• Reduction of DDO from over 90 days to less than 30 days within 3 years

• Increased follow-up with both the customer and sales team• Ability to view root-cause statistics• Maintained staffing levels with 30% increase in deduction volume• Average $2.1 million collections of invalid deductions per year, the

past 5 years• Ability to track the status of items to ensure compliance• Deductions are pushed nightly from ERP system into the

Deduction Web Portal so that account managers and brokers can view all the deductions they are expected to clear