FinTecrity digitizes invoice and receivables management for SMBs.
The EOS Group stands for debt collection services and debt purchase worldwide. It is also developing solutions and services not tied to specific third-party collection systems with its wholly owned fintech subsidiary FinTecrity, whose products help small and medium-sized businesses digitalize their invoice and receivables man-agement and maintain liquidity, especially in times of crisis.
- EOS subsidiary FinTecrity offers B2B and B2C solutions not tied to specific third-party collection systems.
- The cooperation between TeamFaktor NW GmbH, DV Deutsche Verrechnungsstelle, and FinTecrity has yielded a billing product and a factoring product.
- These digital solutions help improve the liquidity of small and medium-sized businesses (SMBs).
- Retailers also benefit from the improved liquidity of their customers and act as multipliers.
- The combination of state-of-the-art technology and human expertise results in the best possible service and support for customers.
When FinTecrity launched its new online portal in April 2020, no one could have guessed that the timing would unintentionally turn out to be so favorable. The Covid-19 pandemic was still in its infancy, and many companies were already wrestling with serious concerns about their liquidity. But even in normal times, its products should help customers maintain liquidity and minimize the risk of default.
Digital factoring solution frees up liquidity.
“There are about three and a half million small or medium-sized businesses in Germany. For many of them, invoice management is a necessary evil. It is done in passing, but without much enthusiasm,” says Marco Gaspar, Head of Business Development at FinTecrity. The company’s DV AbrechnungPlus and DV FactoringPlus products are designed to change this by leveraging digital solutions. These products are currently being sold exclusively via DV Deutsche Verrechnungsstelle, a subsidiary of Deutsche Vermögensberatung, and are intended for companies that have previously struggled to implement a professional invoice and receivables management system, for example, due to their small size.
“Especially in times of crisis, companies are asking themselves a fundamental question: How do I get my money, and how do I get it as quickly as possible? Our factoring solution means that they no longer need to worry about issues such as payment deadlines and defaults,” says Gaspar. Instead, companies can upload their invoices to the DV portal. Thanks to a real-time creditworthiness check, the company will know after just a few moments whether the factor – TeamFaktor NW GmbH in this case – will purchase its invoice. If the invoice is purchased, the full amount is in the company’s bank account within two days at the latest. The customer is invoiced for the factoring fees on a monthly basis.
“Especially in times of crisis, companies are asking themselves a fundamental question: How do I get my money, and how do I get it as quickly as possible? Our factoring solution means that they no longer need to worry about issues such as payment deadlines and defaults,” says Gaspar. Instead, companies can upload their invoices to the DV portal. Thanks to a real-time creditworthiness check, the company will know after just a few moments whether the factor – TeamFaktor NW GmbH in this case – will purchase its invoice. If the invoice is purchased, the full amount is in the company’s bank account within two days at the latest. The customer is invoiced for the factoring fees on a monthly basis.
FinTecrity products focus on SMBs.
The products mainly target, apart from smaller retailers, service providers, consulting firms, and agencies, traditional trades-based businesses. One such firm is Schoeb Elektrotechnik GmbH, whose owner, Bernd Schoeb, now uploads all his invoices to the Deutsche Verrechnungsstelle portal. “Factoring allows me to manage my cash flows in a way that suits me, for tax purposes too. When I have earned my money for the month, I do not upload certain invoices until the turn of the month, in the certain knowledge that I will have my money within two days.” For receivables not purchased by the factor, he uses the integrated billing solution. His reasoning is quite simple: “I just do not want to go through the hassle of sending out reminders and chasing down payments anymore.”
When I have earned my money for the month I do not upload certain invoices until the turn of the month, in the certain knowledge that I will have my money within two days.
Bernd Schoeb, Managing Director Schoeb Elektrotechnik GmbH
Starting off as a one-man operation, Bernd Schoeb now employs around 20 people. However, trying to find a suitable factoring product for his business was no easy matter. “Factoring for trades-based businesses has always been a difficult market,” says Schoeb. “We were simply too small for most providers.” DV FactoringPlus is specifically intended for companies with annual revenues of less than €2.5 million. The average value of each invoice is around €1,500, a figure that is typical not just for Bernd Schoeb but also for many other trades-based businesses.
Retailers also benefit.
The people in charge at Henrich Baustoffzentrum also noticed that many trades-based businesses still have a lot of catching up to do when it comes to their invoice and receivables management. “Our customers are all good tradespeople, but they usually do not have their own administration departments; they take care of the entire invoice and receivables management in addition to normal day-to-day business, often in the evenings or on weekends. Most of them do not even perform creditworthiness checks on their customers,” says Thomas Schulte, Head of Credit Management. There’s no reason to punish a customer that has payment difficulties. On the contrary: “In such a situation, it doesn’t help anybody if we go there and block the customer’s account or threaten to call in a lawyer. Instead, we want to meet our customers halfway and support them, and, in that way, also contribute to improving customer loyalty,” says Schulte. For this reason, the Siegburg-based wholesaler decided to organize meetings with the companies to present the solutions from FinTecrity to them.
Because our customers get their money faster, they pay our invoices a lot faster too – usually after eight days.
Thomas Schulte, Head of Credit Management at Henrich Baustoffzentrum
The results are impressive: Between 30 and 40 customers have already decided to use the products in their own companies. In 2021 they uploaded invoices totaling nearly five million euros to the factoring portal – and the trend for the coming years is upwards. Schulte can already see that the products are well received by looking at his company’s accounts receivable collection period: “Because our customers get their money faster, they also pay our invoices a lot faster – usually already after eight days via SEPA company direct debit.” For retailers, the improved payment behavior frees up important liquidity needed for purchasing, for example to order a large quantity. Even in times of inflation and scarcity of raw materials, they are able to offer their customers stable prices over the long term through this. The trades-based businesses also save a lot of work and improve their financial situations so that they can further expand their own businesses. “A classic win–win situation and super for customer loyalty,” summarizes Schulte.
Other solutions are already in the works.
The FinTecrity sister company EOS KSI mainly has the progressing digitalization of processes to thank for the fact that it can now also process the overdue receivables of small and medium-sized businesses. The expenses used to be too great when compared with the expected order volumes. “The SMBs can now upload and administer their overdue receivables in the system by themselves. This keeps the commissioning costs low for both sides,” says Johannes Brummer, Head of Marketing at EOS KSI and FinTecrity.
FinTecrity is currently working on new features to resolve existing media interface issues and streamline the processes even more. Marco Gaspar gives an example: “Customers today still upload their invoices to the portal manually. We are currently working on a solution that will allow this to be done with one click in the software used by the SMB after creation. Our solutions should make the job easier for customers. To that end, we listen closely to our customers and observe how they use our services.” Additional services, such as a factoring solution for lawyers and a billing platform for driving schools, are already being developed.
FinTecrity is currently working on new features to resolve existing media interface issues and streamline the processes even more. Marco Gaspar gives an example: “Customers today still upload their invoices to the portal manually. We are currently working on a solution that will allow this to be done with one click in the software used by the SMB after creation. Our solutions should make the job easier for customers. To that end, we listen closely to our customers and observe how they use our services.” Additional services, such as a factoring solution for lawyers and a billing platform for driving schools, are already being developed.
Please don’t hesitate to contact us if you are interested in FinTecrity’s solutions.
Johannes Brummer
Head of Events & Partner Concepts at EOS Deutschland GmbH
Tél.: +49 70669143-9664
Photo credits: EOS (3), Schoeb Elektrotechnik, shutterstock