How Locus uses Growfin to reduce DSO by 20%

Locus has seen improved cash collections,  accelerated revenue-to-cash cycles, and happier customers after having begun using Growfin.

About Locus

Locus is an integrated dispatch management platform for final mile deliveries. The platform automates supply chain decisions by adding intelligence to operations, and helping companies make the right decisions to delight their customers.

Locus has two products as part of its suite—DispatchIQ that helps companies optimize delivery routes and schedules, and TrackIQ that helps companies optimize fleet with real-time tracking, insights and analytics.

Challenges with hyper-growth

On 1st June 2021, Locus made a big announcement on LinkedIn. They had just raised a huge round of funding—USD 50 Million in Series C, taking the total funding to USD 78.8 Million. With clients such as Nestlé, BigBasket, 1mg and Myntra, Locus had a great go-to-market engine. Fuelled by the funding, Locus doubled down on its growth levers. There was one problem though—collections.

What’s harder than securing a huge round of funding? It’s probably maintaining a healthy booked revenues to cash collected ratio. Almost every startup addresses their burning issues first, which is usually customer acquisition and building a healthy pipeline for sales. What’s addressed right at the end is collections, which often grows to be a bottleneck for scale if unaddressed earlier.

In the case of Locus, the problems were two-pronged—visibility of A/R and monitoring customer communications.

Under the hood: What does Locus’ tech stack look like?

Invoicing & ERP

CRM

A/R Automation

Lack of real-time visibility into their accounts receivables

Locus has been using Zoho Invoice for their invoicing requirements. With entities in US and India, they would compile data across these regions to get a glimpse of the overall health of their Accounts Receivables.

In addition to this, they were using running historical reports looking at past data as well as current reports that would present the status quo. Needless to say, without an AR automation solution in place, things were being manually run.

Especially when requests came in for statutory purposes, like pulling a historical AR Aging report as on a past date. Readying the report meant that they had to look up all the invoices that had all been closed since then and count them in to understand the aging. With many of these invoices receiving partial payments, this complicated matters and the team ended up losing a day’s effort to prepare this.

With more entities, the effort needed to pull up these reports was higher for Locus. They threw more man hours to deal with these complexities, until there came a point when they had to put in place an automated system that would handle their growing scale.

In addition to these requirements, Locus was also keen on slicing and dicing data to understand their receivables at a more granular level by adding more parameters to their reporting. For example, scenarios would crop up when they would want to understand the outstanding invoices for the SE Asia region, as on a past date. This added to the complexities.

At Locus, the collection life cycle usually started with manual follow ups and then eventually ended in account suspension in month 4 or 5, if the customer did not pay. Such delinquent or churn accounts had to be removed from their reporting, which was another time consuming process with data from multiple entities involved.

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Monitoring customer communication

The A/R team at Locus manually tracked receivables on Excel Sheets, which listed all the customers and their outstanding balances. The collections team typically started their follow ups on Mondays and continued it through the week. The challenge with manual follow ups was that they had to have a resource dedicated for monitoring the responses for emails and updating the responses on the master sheet.

Whenever a response came in from customers, there was no way for it to automatically reflect in the collector’s followup list. As a result, customers would receive repeat follow ups despite having responded earlier. While this seems like a straightforward thing to do, when there are multiple stakeholders following up with thousands of invoices from customers, it can be hard to keep track of customers who paid, either partially or fully.

Tracking follow up emails’ deliveries-to-replies was a blackbox and this was leading to not only the customers’ getting impacted but also the collectors spending time on accounts that did not need to be followed up on.

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How Growfin transformed the way Locus managed receivables

Strategizing Collections

We love the fact that we can create different automated follow-up strategies for different customer types. Very useful to us!

Growfin helped streamline the way Locus collected cash from customers. Follow up emails from generic IDs often used to end up in spam. With Growfin, Locus was now able to not only automate their follow ups but also personalize the ‘from’ address so the mails went out from the collectors’ email IDs. The Collections Strategy feature also auto-pauses the follow ups when customers reply providing a good payment experience for customers.

Locus now sends different types of emails based on how the invoices have aged. They can send a statement with multiple invoices in a single email to avoid spamming customers.

And when customers reply, their responses are captured in a unified, shared Inbox, which is visible for all stakeholders, keeping them on the same page.

Locus is also able to build collector’s and sales’ worklists pertaining to their assigned accounts automatically. Collections Strategy assigns tasks internally to stakeholders automatically, as an account moves through a follow up cadence defined in the strategy, capturing the context of non-payment in the task. Not only do the follow up emails go out automatically but also the actionables from these cadences get assigned automatically to finance, sales and CSMs.

Locus has also configured the follow ups to go out in the timezone of their customers for maximum opens and responses in Growfin. Locus is able to track email deliveries, opens, reads and replies so they are well informed to know exactly what action to take next for each customer.

Tracking Collections

Growfin also gives real time and historical aging and collections to predict future expected cash flows.

Locus faced a couple of key challenges with tracking their A/R process—visibility into current and historical A/R data, and being able to see a real-time view of how customers are responding to their emails and making payments.

For getting visibility easily into the A/R data, they extensively use the company level AR Dashboard in Growfin. There’s a dedicated dashboard called the ‘My Team Dashboard’ in Growfin for A/R managers that Locus finds handy for managers who have specialists in their team. The ‘My Customers Dashboard’ is used extensively by individual collectors.

Locus is also able to track how much the team has been able to collect and how fast they’ve managed to do it compared to an earlier period.

Collector performance tracking has become vastly easier for Locus now. Be it tracking the number of customers that have been followed up with, the number of Promise-to-Pays (PTPs) that have been obtained, the output of collectors’ activities is trackable today in real-time with just a few clicks.

Iron out inefficiencies in your AR process, improve collection efficiency and accelerate your cash flow with better predictability.

Collaborating with multiple stakeholders

My stakeholders have real time visibility of over dues. My team uses Growfin to collaborate with Sales and CSMs for overdue and disputed invoices. We can also escalate/flag off a few customers to CSM in case of high outstandings.

The collections process in Locus involves multiple stakeholders, including the finance, sales (account managers), customer success as well as the legal teams.

Where Growfin also helps is in keeping the context of A/R data intact for finance, sales and legal teams for collaboration to be more meaningful. Tasks get created for users in a manual as well as an automated fashion. For the latter, auto-assignment of tasks happens by the Collections Strategy feature as the defined cadences get executed for different segments of customers.

With Growfin in place, Locus has been able to create a process where collaboration between the different teams is a cakewalk. Aided by solid collaboration capabilities in Growfin, Locus has been able to automate the way tasks get created for different stakeholders.

Once tasks are auto-created and assigned to a stakeholder, they receive a notification in Slack immediately. This way, the sales team is now able to stay on top of their collection activities. The cherry on the top is being able to reply to these tasks from within Slack and also mark tasks as complete.

When customers become delinquent, they are taken over by the legal team. This collaboration between legal and the A/R team also happens from within Growfin.

Monitoring metrics with built-in A/R Analytics

Growfin has been able to streamline our AR process and improve our collection efficiency. We’re now able to report key AR metrics like DSO and other collection data till date for different legal entities.

The team uses the built-in dashboards in Growfin to look at an overview of key A/R metrics like outstanding customers, invoices, collections and payments.

The dynamic A/R Ageing Dashboard, A/R Dashboard, Manager and Collections Specialist-specific dashboards are some of the highly used features at Locus.

Locus is also one of the early adopters of the AI/ML features in Growfin. The Expected Payment Date in Growfin allows Locus to know when a customer is going to pay them. Health Score in Growfin gives a rating for every account that indicates the credit worthiness of the customer.

Both these properties are based on past payment behaviors of the customer and help Locus plan its collection activities in advance. Changing strategies before hand, initiating reach outs at the right time, looping in sales and CSMs are some of the things that the team does to be proactive with collections.

The team at Locus also finds the audit trail useful, especially in the case of delinquent accounts to track all the activities that happened pertaining to a customer.

What’s next?

Growfin is working with Locus to build out a deeper Salesforce integration where the team can access Growfin completely within their Salesforce accounts. So the sales team would be able to see accounting data as well as customers’ contact data, which includes metadata like the customer region and their assigned CSM, etc within Salesforce.

With each of these data points available in different tools, Locus is looking to make Growfin its single source of truth for the team to manage receivables end-to-end, from invoice to cash.

In addition to this, Growfin is all set to introduce Advanced Analytics, which will further help the team in managing A/R and add to the performance tracking capabilities.

Unicorns across the globe use Growfin

Think Growfin can be a good fit for your organization? Reach out for a demo, personalized to your invoice-to-cash workflow.

Schedule a call with our solution consultant to understand how you can accelerate your cash collections.