Imagine a world where all your customers pay you on time, and your staff are focused on revenue generating activities, instead of performing manual processes and chasing late payments.
This is the world that Sydney-based entrepreneurs Arjun Singh, Shailendra Patil and Raj Kuckreja envisaged before embarking on their latest venture ezyCollect.
Reminding customers about unpaid invoices is an onerous task when you consider the time and money spent on follow-up emails, phone calls, and good ol’ snail mail.
“With over 95 percent of business failures attributed to poor cash flow, solving this problem has a massive impact on small businesses in Australia,” says Singh.
Launched in February this year, ezyCollect’s overarching mission is to help businesses better manage their receivables process.
How? The platform connects to popular online accounting systems – like MYOB and MYOB Account Right Live, with Xero, Netsuite, Reckon and Quickbooks coming soon. This then allows businesses to set up a reminder plan that automatically chases customers who are overdue in their payments. This set up process takes less than an hour to complete, according to Singh, and the software also allows businesses to thank the customers who are punctual.
“ezyCollect is a set and forget solution for debtor management,” says Singh.
Singh is cognisant of the fact that they have global competitors, but says that ezyCollect is the only web-based receivables management software product in Australia that integrates with other accounting systems and allows customers to be automatically reminded about payments based on a ‘Patent Pending’ communication rules engine.
“This rules engine orchestrates the communication both internally within the business and also externally to the debtors … therefore it maximises the efficiency of internal staff by focusing them on essential debtor follow up activities – such as calls or dispute resolution – whilst automating the rest of the process – such as sending personalised email reminders and statements,” says Singh.
“This automation of communication ensures consistency, which is critical to improving the collections process and reducing DSO (Days Sales Outstanding).”
In order to maintain a competitive advantage, the ezyCollect software will be incorporating a number of value-add services so that customers have a one-stop shop for the entire invoice-to-collection process. Some of the services that will be part of ezyCollect’s ecosystem include credit checks, sending legal letters, sending debts to collection agencies or lawyers, and bookkeeping services, among many more.
Singh believes these services will also create a barrier to entry for potential competitors: “ezyCollect becomes more than just a software package, [it becomes] a combination of activities and processes that are integrated into a larger ecosystem of receivables services.”
“This will create a distinctive advantage and provide the foundation for a sustainable business that is not easily replicated.”
ezyCollect operates as a Software as a Service business, offering customers two monthly subscription plans (Standard and Customer) with no lock-in contracts, as well as a 30-day free trial period. Singh says that to date 99 percent of customers that have trialled the software has continued on using the product.
When asked about what spawned the idea for ezyCollect, Singh says it was his previous experiences of running businesses in which receivables was the biggest issue.
Singh has spent the last 12 years working in and managing a diverse range of businesses from large multinationals to medium-sized family businesses. Most recently, he turned around a struggling small family business in three years, increasing revenue by more than 75 percent per annum over this period.
This resulted in the company making it onto the BRW ‘Fastest 100’ companies in Australia list – featuring promising high growth turnover businesses emerging in Australia over the last three years.
“Having grown a business from $2 million to $8 million in turnover in just three years resulted in a lot of pressures in the way we managed our cash flow. Receivables was the biggest issue in this chain … ezyCollect was born to solve this problem,” he says.
To understand the cash flow benefits of using ezyCollect, the website offers an ROI calculator. As per screenshot below, the ROI calculator puts into perspective how much money is spent on the receivables process, compared to how much is spent automating it on ezyCollect.
The target market for the ezyCollect is SMEs with high transactional volume with accounts receivables – generally, businesses that have between 5 and 50 employees with an annual turnover of $1 to $30 million. Singh says this includes sectors like professional services, manufacturing, wholesale trade, construction, transport, postal and warehousing.
Based on research undertaken by the ezyCollect team, the size of the target market based on the industries defined above represent approximately 8 percent of the 2 million SMEs in Australia.
Since launching the business five months ago, ezyCollect has acquired customers in every state in Australia, and gaining traction in New Zealand. Growth rates have been over 100 percent month on month, according to Singh.
The startup has been bootstrapped to date, though the co-founders are open to the prospect of raising capital to fund their international expansion into the UK and US in the latter half of 2015.
Singh says the startup’s biggest success has been satisfied customers: “Some customers have shared that with ezyCollect their cash flow has improved over 50 percent in just the first 60 days of using the program.”
On the flipside, Singh considers education to be the biggest challenge they are facing at the moment. He says people often look at debt collection as a last step, whereas ezyCollect is all about the pro-active engagement with customers from the day the invoice is overdue.
“Given that this product is such a unique approach to a common problem, getting customers to think of the ezyCollect solution requires educating customers. This takes time and money and slows down the growth,” he says.
“Our learning from this is that we need to use social media, partners and conferences to educate – and then the sales will come as a result.”
So what does the future hold for ezyCollect? Singh says ezyCollect is continually evolving. Innovation is a constant focus for the startup; and the ezyCollect team is always referring back to customer forums and feedback boards to assist making improvements.
“We get a lot of feedback from our customers, and we want to make ezyCollect the best credit management software for SMEs. We release five to six new features each month based on our customers’ feedback,” says Singh.
Obviously, they’re a team of hustlers. It will be interesting to see where this startup is positioned in a year from now.
More information is available via ezycollect.com.au.
Image: Arjun Singh, Co-Founder of ezyCollect. Source: Provided.