Headquartered in Milwaukee, Wisconsin, Jacobus Energy, Inc. is a $500 million petroleum products distributor. Started in 1919 as a family-owned coal delivery service, Jacobus today boasts over 350 employees and 27,000 customers across the Midwest and South. The firm sells diesel fuel and gasoline to trucking companies and retailers, delivers heating fuel to businesses and homeowners, and provides HVAC services as well as environmental services including the recycling and clean-up of waste oil: all from three sales offices and a dozen dispatch locations.

Before 1998, Jacobus managed their collection process by generating lists of delinquent accounts that the collectors would then use to prioritize their work. As the business grew, there was a tendency for some past due accounts to be overlooked and cut-off for non-payment, which raised the likelihood that those accounts would take their future business to another distributor. In response to this unnecessary loss of business, Jacobus began investigating Receivables & Collection Management (RCM) solutions that would assure a comprehensive collection process, eventually selecting eCredit.

While Jacobus was interested in implementing collection software to lower Days Sales Outstanding (DSO) and otherwise improve collection performance without adding headcount, the underlying reason for improving collection performance was to facilitate more sales to both existing customers and new accounts. By offering liberal credit terms backed up by an assertive collection process, Jacobus was able to adopt aggressive sales tactics in order to grow the business in a very competitive market.

Implementing eCredit took approximately two months. One of the biggest challenges was getting the credit staff to forsake their paper reports and notes as well as their reliance on the AS400 based accounts receivable software for looking up payment and account status. A/R data is downloaded nightly from the AS400 into eCredit's database, updating the workflow and re-prioritizing the collector's work queues. Everything a collector needs in terms of both information and workflow tools is available in eCredit, so after about two weeks the collectors were told to stop relying on their paper records and AS400 look-up screens or both would be taken away. Once they were forced to make the transition, the collectors' productivity immediately rose and they have not looked back. "What really distinguished eCredit was their flexibility to match our specific collections strategies," said David Schier, Credit Manager, Jacobus Energy. "Nothing is black and white, there are no 'standard' collections approaches, eCredit delivered us a solution we could customize to meet our business practices."

The adoption and use of eCredit also provided a wealth of reporting and analytical tools not available prior to its implementation. Soon the old limitations of relying on the AS400 became apparent; a major shortfall was that it generated an invoice date with no accounting for different terms of sale. With eCredit, it was now possible to view A/R aging based on due dates, collect statistical data on individual collector' performance and assess business types in terms of sales. Jacobus could then code accounts based on customer business types and risk categories and use these codes as the basis for building the collections strategies that drive eCredit's workflow. This information was also particularly useful for monitoring and fine tuning the collection process. The performance metrics allowed Jacobus to institute a very effective collector incentive program that keeps the collectors focused on maximizing cash flow.

When Jacobus chose eCredit, they hoped to realize a return on their investment over the course of a year. In fact, the collection software had paid for itself in six months. The over 30 day past due balances dropped from roughly 8.9 percent to 3.3 percent with a corresponding reduction in DSO from 27.3 to 20.2 days (typical terms are Net 15). Just as important, Jacobus has been able to substantially increase sales with no additions to the credit department. In 1998 sales were $147 million, but grew to $470 million by 2004 with no change in the credit department headcount. A manager, three collector/credit analysts, and one administrative assistant are able to handle an average daily accounts receivable balance of roughly $25-28 million.

At this juncture, Jacobus is looking to expand the scope of their RCM solution. The firm's entry into the Spot Fueling business has increased the number and impact of payment disputes on their order-to-cash cycle. In addition, their very large and active customer portfolio is ripe for the application of automation to their credit decision and portfolio analysis processes. Jacobus is therefore now in the process of implementing the new eCredit Enterprise Edition - using a software-as-a-service deployment model rather than hosting it themselves - to get access to this added functionality and continue to improve on the tremendous RCM efficiencies they have already realized. "Having used eCredit for a number of years already for collections, adding the credit automation capabilities was a natural step for us," said Schier. "With eCredit we've already seen DSO drop by over 7 days representing significant annual savings. Enterprise Edition enables us to provide the next phase of bottom line results that the company has come to expect from the credit and collections group."