Custom web development for outstanding accounts receivable reduction

The application of the results of research on decision-making in the management of outstanding receivables and the connection with the legal field, the 100% legal guarantee in case of overdue payments and the automatic operation of the system are the innovations of the FAIR PAY CONTROL outstanding receivables management system, for which LogiNet supplied the custom web development.

The problem of outstanding receivables: how can it be prevented?

Late payments already represent a significant proportion of the domestic economy (around a quarter of invoices are paid late), a situation that has been exacerbated by the pandemic. Cégmenedzser Szoftver Kft., a company that implements and develops ERP systems and is therefore in contact with many companies, has experienced this problem first hand: its staff spent 4 hours a week, i.e. 2 working days a month, just on managing receivables, and the average late payment was still 15 days.

The solution, together with DHG Law Firm, was to create software supporting a unique outstanding receivables management methodology that focuses on prevention, automation, continuity and, if necessary, immediate initiation of legal action, rather than on dealing with the problem after the fact. The project company, FAIR PAY CONTROL Account Monitoring Zrt., has developed a completely new basis to maximise the benefits of the methodology, keeping in mind the customisable changes in customer needs.

"It is a reflection of stability and reliability that we have established a limited company to support our operations with the software. This is guaranteed by the 15 years of operation of Cégmenedzser, the 21 years of DHG Law Office providing a 100% legal guarantee, the 12 years of claims management experience based on the methodology and the unique IT development that forms the cornerstone of our service", emphasised Tamás Jagodics, owner of Cégmenedzser and CEO of FAIR PAY CONTROL Zrt.

The positive customer engagement, clear communication and the unique automatically triggered legal procedure, the full costs of which are paid in advance by the service company, are unique in the domestic and international markets. The implementation experience also indicates that the service methodology has significantly reduced arrears and arrears, all without customer confrontation. The financial benefits are not insignificant either, as the financial officer or the company manager is relieved from time-consuming debt management.

Custom web development tailored to customer needs

The owners of FAIR PAY CONTROL had a clear vision of the functionality they wanted to offer their customers, and in the spring of 2020, they commissioned LogiNet Systems Ltd. to develop a custom web solution. The realisation of the Java-based project was helped by having developers on both sides, speaking "one language", and already having a well-thought-out idea in the development process. This was also important because the timeframe was quite tight: the software was completed in five months.

From an IT point of view, the novelty of FAIR PAY CONTROL is that the invoices are "run through" the invoice monitoring system, of which the company's partners are informed in advance. The invoices issued are taken up there by the employee, but once NAV3.0 is up and running, they will no longer need to be recorded as they will be automatically entered into the FAIR PAY CONTROL system.

The system will automatically detect if the invoice has not been paid by the due date and, in the event of further non-payment, full legal proceedings will be initiated, the costs of which will be advanced by FAIR PAY CONTROL, thus relieving businesses of both financial and process management burdens.

The software can also be linked to companies' ERP systems.

During the development, the project experts also took into account trends in receivables management and changing market needs. Thus, in addition to email, the possibility of notifying partners by SMS of important stages in the invoicing and payment process was integrated into the software.

An instalment payment module can also be requested and customised by the customer, which continuously monitors the payment deadlines for authorised partners.

An important development was to allow the system to communicate not only with one contact person per customer but with up to three if necessary.

The possibility of international expansion meant that the software had to be multilingual (useful for a foreign subsidiary) and GDPR compliant, as more people have access to the data.

The software's processes are based on best practices in many sectors, but in some cases, there is also the possibility for customisation. Indeed, different industries may have different benchmarks, which may be reflected in the specificities of customer communication and payment deadlines.

The software users can monitor the process through a dashboard, with a wealth of statistics and information to help them create more accurate business plans, and managers can tailor their customer strategy to actual payment patterns.

Solid results, ambitious vision

FAIR PAY CONTROL officially went on sale in October 2020, but the software has already been tested with partners. The experience so far has fully lived up to expectations: of the 11 570 invoices issued in the six months of implementation (for a total value of around €6.2 billion), 162 only required the sending of a lawyer's notice and only 6 resulted in the issuing of an order for payment. 

The FAIR PAY CONTROL service and the software developed by LogiNet, which is the cornerstone of the FAIR PAY CONTROL service, have been successfully deployed in both the SME and large corporate sectors.