One of the most common and widely used key performance indicators used in the accounts receivable industry is days sales outstanding. This metric helps companies to decide if they are collecting the right amount in comparison to what they’re selling. For companies like Tagua Gunleather, they wanted a way to decrease their days sales outstanding while also increasing their sales. They were able to find the solution to this in automated accounts receivable software.
Tagua Gunleather, located in Miami, Florida, manufactures and sells leather gun holsters, carriers and other weapon accessories. Tagua has been in business for over 10 years creating premium leather items from 100 percent genuine cowhide. Customers of Tagua Gunleather can either purchase their products straight from their e-commerce website or they can be purchased in one of the many retailers that carry Tagua Gunleather items. For those retailers carrying their products, Tagua Gunleather is extending credit terms and collecting on invoices, which is where the need for a solution to streamline their accounts receivable process arises.
Tagua Gunleather first started using automated accounts receivable software in 2015 while on QuickBooks. Due to significant company growth in marketing and operations, the company had to put their use of Lockstep Collect on hold as they made an ERP migration to Microsoft Dynamics NAV in 2016. As soon as they were implemented, Tagua Gunleather was itching to get back to using Lockstep Collect automated accounts receivable software for their collections.
Sincle reimplementing Lockstep Collect, Flam has seen success in just a few months. In two months, their DSO has decreased by 26% to 44 days. With Lockstep Collect, Tagua Gunleather customers can access their account online to see statements, invoices, credit memos and pay their bill. Customers were eager to have this feature back and Tagua Gunleather was eager to have a one-click option back, eliminating the additional task of sending each customer these important documents.
“In the collections world, only the earliest bird eats. So if you lose time, or if there’s a problem and it takes a minute more, it could break that deal,” Flam explained. “So the possibility of the customer to have access online and pay without calling them of them calling us, just send them an email. It’s great.”
Tagua Gunleather is setting new goals for their use of Lockstep Collect and extending the product beyond their collections department. Flam teamed up with their sales department to send a mass email blast to all customers with a sales promo flyer. However, Flam indicated to customers that they could only receive this deal if their balance is clear. Of the 2,400 customers that received the email, 37 percent have opened it and, in just two days, Tagua Gunleather was able to sell 2 deals worth over $1,000. “It’s already a success and I’m trying to use every single department in order to collect,” Flam said
Decreasing DSO doesn’t just look nice in the reports you hand out to executives, but it opens doors in other departments, as well. Since Tagua made it a point to decrease their outstanding accounts receivable, they were able to sell even more and offer more to their customers. Without the cash flow there from the invoices they collected on, it wouldn’t have been possible.