Athlon Car Lease, provider of operational car lease services, is an established user of OnGuard’s credit management software, having first deployed OnGuard’s technology at its headquarters in the Netherlands in 2002. Now undergoing a sustained period of growth and internal transformation, the company is evaluating the technology employed across its operations, and aims to consolidate by selecting the platforms that have proven to be effective and deliver business benefits and real return on investment.
Paul Dassen, Vice President of Credit Risk Management at Athlon Car Lease International, explains “Our strategy has been to adopt an international approach to our operations, and follow best practice, especially within business-critical areas such as credit management and credit risk.” Dassen continues “As we have grown internationally it has become crucial to have a centralised oversight of credit management functions. We knew from OnGuard’s deployment in our Dutch operations that this was something its software could provide. The capabilities of its platform were further validated with the acquisition of Masterlease Italy in 2009, which was an existing OnGuard user.”
OnGuard’s solution has been implemented at Athlon’s operations in The Netherlands, Belgium, Luxembourg, France and Italy, while Spain is expected to go live in the coming months. According to Dassen, its experience with using the system in the Netherlands has proved crucial to an effective rollout at its other global divisions and has ensured that a customised platform is delivered. “It was important for us that the OnGuard team recognised the knowledge our staff were able to contribute, and they have drawn on this experience to ensure the solutions deployed are highly-tailored to our local needs.”
Athlon’s operations differ in size across countries, with some leasing as many as 125,000 vehicles, whereas others operate much smaller fleets of about 5,000. However, using OnGuard, the company is able to support any size of operation, whilst the cost efficiencies remain consistent. “An important factor is the efficiency gains we have been able to make in several countries, and also those that we expect to make once the new systems are operational,” confirms Dassen. “We now have one tool that steers our staff across all entities.”
Monitoring red flags on road to payment
Proactive, positive credit management is playing a key role in allowing Athlon Car Lease to manage its financial exposure and stimulate cash flow, while also providing it with closer control over debtors’ portfolios and minimising time spent chasing unpaid invoices. “Risk management has become an increasingly important area for us following the economic downturn and, in credit risk particularly, it is essential that it is handled professionally and customers given the contact required” says Dassen.
Implementing OnGuard’s software solutions has enabled Athlon to build a sophisticated profile of customers, including payment terms, historic payment behaviour, disputes raised and credit scores. It has also helped predict when its customers may be getting into difficulty by spotting – and anticipating – early warning signs or red flags. “OnGuard allows us to follow an effective debtor strategy. ” says Dassen. “These parameters can be set according to local requirements. For example, much tighter controls can be implemented in regions harder hit by the recession and where credit risk is higher. Certainly, we need to be more alert in certain countries, and are able to adjust our credit management parameters as necessary”.
The OnGuard software includes parameters that ensure red flags are raised according to specific business models and in respect of local credit conditions and payment processes. Credit and payment periods vary from country to country and in some countries late payments are a simple business reality. Payment methods including direct debit, cheques and drafts vary across regions and certain countries employ distinct practices entirely, for example the Italian RIBA (Electronic Bank Receipt) and the French TBF (Transferts Banque de France). Payment cultures are also discrete, including the point at which collection agencies are engaged and the perceived acceptable length of the collections process. Furthermore, certain types of customers, local governments with multiple layers of management and approval processes versus smaller private companies, need to be dealt with in different ways. OnGuard can accommodate these subtleties whilst providing a consistent approach at a group level.
“In OnGuard we have a solution that not only performs well, but allows us to be proactive in our approach to credit management. This allows us to keep arrears as low as possible, and identify at an early stage if there is an issue with a customer, and handle the situation with sensitivity to ensure we maintain our close relationships,” concludes Dassen. “The end result is that we can keep any potential losses to a minimum, apply late payment charges efficiently, and improve the bottom line.”
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