Cash Flow Transformation Enhances DKSH Thailand's Customer Payment Methods

DKSH Thailand’s Cash Flow is Queen Project has successfully transformed customer payment behavior from previously using cheque payments to the more efficient method of bank transfers. It significantly enhances cash flow management while promoting environmental sustainability.

DKSH Thailand is one of the largest organizations in the market in terms of sales and employs over 10,000 specialists. It provides tailor-made services covering the complete Market Expansion Services value chain, from sourcing, market analysis and research, marketing, sales, distribution, logistics, and after-sales services of a diversified range of products. We currently serve over 550 multinational and local companies through our four highly specialized Business Units.

Challenge

Prior to this project, we discovered that over 57% of our customer payments were conducted via cheques, with only 43% opting for bank transfers. This strong dependence on cheques posed various challenges, including delayed cash inflows that hindered our financial operations.

Furthermore, the frequent dispatch of motorcycles for cheque collection escalated environmental concerns by contributing to increased carbon emissions and pollution. The use of motorcycles also exposed our employees to potential road accidents, prompting safety concerns. In response to these challenges, a strategic shift towards a more efficient and sustainable payment method became imperative.

Approach

This project employs a proactive strategy, offering incentives such as discounts to customers who choose bank transfers over cheque payments. The project commenced with the Business Unit Performance Materials team and employees received a commission incentive for successfully encouraging customers to opt for bank transfers.

Through diverse approaches, consistent actions, and unwavering commitment, the project effectively informed and guided customers, facilitating their transition to the preferred payment method.

Result

The transition from cheque payments to bank transfers has yielded remarkable results, helped transform our operations, and contributed to a more sustainable future.

By embracing modern payment methods, we have significantly reduced cheque usage, with the percentage of cheque payments declining from 57% in 2017 to 11% in 2023. This shift has also led to a substantial decrease in overdue payments, with the overdue ratio dropping to less than 20% by 2023.

Additionally, eliminating cheque collection by motorcycles has saved us more than 4,600 rounds of driving, resulting in substantial fuel and maintenance savings while also reducing our carbon emissions. Through these efforts, we streamlined the financial processes and were able to contribute to a greener future, hence reinforcing our commitment to efficiency and responsibility.

This project received the DKSH Thailand Fantree Awards 2023 for its outstanding contributions to financial innovation and environmental sustainability.

Throughout the project's journey, we emphasized the importance of delivering precise information and guidance to both customers and DKSH employees. Our sustained effort and unwavering commitment have proven instrumental in driving successful and impactful change.

Naowarat Boonsavangvong - Senior Manager, Finance Business Partnering