Christopher Kane is a high-end fashion company, founded in 2006 by brother and sister duo Christopher and Tammy Kane. They sell their designs through an e-commerce site and wholesalers nationwide.
A long term partnership, that is constantly growing
We have worked with Christopher Kane since April 2019 covering some key bookkeeping tasks, but at the end of 2020 during a regular account review, a big problem became evident. Josh, one of our financial controllers, met with Alex Bacon from Christopher Kane and Dan Major, their recently appointed FD, to have an open discussion about the state of their finances. It became clear that many of their wholesalers were paying their invoices later and later. Despite having clear credit terms, many of these payments weren’t made within the agreed parameters. Josh dug a little deeper and found that Christopher Kane didn’t have any processes in place to chase these late payments, and had no time to set them up. We were already responsible for invoicing these customers, but once we sent the bill, the Christopher Kane team lacked any process to follow up.
These late payments were a real pain point for Christopher Kane, and causing the team a lot of stress. Over half of the SMEs in the UK are owed money, totalling over £23 billion, according to the latest figures. So, while owners may look at their profit and be happy, they are often surprised to find there’s no cash within the business. This can mean that it’s more difficult to plan and make informed business decisions, and can land a company in hot water if it’s not dealt with. Josh took the challenge on board, confident that we could provide the perfect fix.
A simple solution to a complex problem
The first thing Josh did was collaborate with Dan and Alex to create a schedule to chase payments. They then created several email templates as reminders. Once these were signed off, Josh uploaded the information to Chaser, which automated the process. Reminders are sent out periodically leading up to the due date of the invoice, and after this date until they are paid. This process leaves no account forgotten.
The automated set up covers about 70-80% of the Christopher Kane book, while we deal with the rest depending on their individual payment terms (some pay a deposit ahead of their invoice, for example). Brooke, one of our accounts technicians, chases these using predetermined templates decided on by Dan and Josh.
A bit of insight from us = HUGE progress for them
The impact this simple process had was huge. We took over Christopher Kane’s credit control in December 2020 and the debt owed was roughly £724k. By the 9th of February, this was already down to £374k, falling even further to £284k by the end of that month – we collected a total of £440k in just 2 months!
When we took over the credit control, some invoices were due in early 2020 and still hadn’t come in. These were all paid in the first 2 months of 2021 thanks to Josh and Brooke’s hard work.
Knowing that the money is coming in on time allows Christopher Kane to plan for the future – they no longer have to be wary of their cash flow and can create accurate forecasts, knowing that the money due is reliable
We all know how awkward it can be to chase money. We’ve taken those difficult conversations off the Christopher Kane team. This not only frees up their time, but also allows them to forge better relationships with their customers and focus on providing fantastic service. Brooke is in regular contact with some of their biggest clients which means she can also build an ongoing relationship with their finance teams, making keeping control of the credit even easier. Being aware of specific client payruns provides even more insight and accuracy into forecasting Christopher Kane’s cashflow.
Now they can sit back and relax
One effect of the change, that shouldn’t be understated, is the peace of mind Josh and Brooke have given Dan and his team. As a newly appointed FD, Dan faced a huge challenge addressing the credit issue. By taking that problem off his plate, we saved him a lot of energy and sleepless nights. The team no longer has to bother to find time to chase these accounts, or worry about damaging their reputation by pushing too hard to get the money in. They can spend their time on more productive and efficient tasks, like building up sales and cutting unnecessary costs. These result in real growth for the business. They can rely on the bills being paid on time and can all sleep easier without that weight on their shoulders.
It’s only been a few months since our credit control process was embedded into the services we provide for Christopher Kane, but already a massive problem has been minimised and a solution is in place for the future. Going forward they have a solid foundation of credit control, which frees up their time, resources, and peace of mind to spend elsewhere in the company