Xentral's Offline-to-Online Payments Shift Spurs an 80% Reduction in Outstanding Receivables

Xentral’s Offline-to-Online Payments Shift Spurs an 80% Reduction in Outstanding Receivables

Time Stamp: August 13, 2023 9:53 AM
Source Node: 2210460

Xentral GmbH is a lean ERP cloud software that automates day-to-day operations for small and medium-sized enterprises. By consolidating orders, inventory, payments, and shipping processes in one place, Xentral empowers entrepreneurs for efficient growth.

Offline Payments Hindering Growth Ambitions

Due to offline payment methods, Xentral faced limitations in scaling its operations and expanding globally. Around 40% of customers paid via SEPA (a direct debit model available in 35+ European countries), requiring manual updates in their legacy ERP system, while the remaining 60% relied on invoice-based payments that demanded constant follow-ups.

Besides being highly time-consuming to its lean finance team, the late payments impacted its cash flows and, ultimately, the bottom line.

Setting the Foundation for a Massive Overhaul

The Xentral team, led by Andre Klan (Head of Finance & Accounting) and Julian Freichel (Team Lead, Corporate Development), embarked on an ambitious plan to drive transformation. Their goal was to migrate the entire customer base to online payment modes (credit card or SEPA Direct Debit) within a year.

They partnered with Chargebee, leveraging its robust revenue growth management system and integrations with payment providers Mollie and Stripe.

Driving Effective Change Management in Phases

Xentral recognized that successful implementation required cohesive internal efforts and customer-centricity. They mapped out crucial phases, such as transferring SEPA mandates, gathering payment information, and migrating subscriptions. Then they worked backward on what level of communication the customers should (or should not) receive at each phase.

The following flowchart illustrates Xentral’s strategic approach and phased execution plan, spanning over five months.

“Our primary goal was to ensure customers understood the long-term benefits of this change. By switching to online payments, our customers could leverage the Chargebee self-serve portal for plan upgrades or user license changes instead of contacting our team. This convenient solution proved an instant success, significantly saving time for our customers and support teams,” said Julian.

Achieving Operational Excellence and Financial Efficiency

  • 90% subscriptions on auto-pilot: Through this initiative, Xentral successfully transitioned approximately 90% of customer subscriptions to online payment modes, reserving offline options for high-value subscriptions. This shift significantly boosted productivity and efficiency for the Finance team, as nine out of ten subscriptions now operate seamlessly without manual intervention.

  • Reduction in outstanding receivables: The transition to online payments increased on-time payments and eliminated the need for manual follow-ups, leading to an impressive 80% reduction in outstanding receivables within just five months. This achievement directly improved cash flow, further strengthening Xentral’s financial position.

  • Capital savings and better resource allocation: Despite processing 50% more revenue than the previous year, Xentral’s lean finance team handled the increased workload without requiring additional staff. This capitalizes on better resource allocation and ensures efficient operations to support the company’s growth trajectory.

“Chargebee empowers us to turn our business goals into actionable plans without worrying about the technical possibilities. With significant achievements in our payment collection processes, we’re now exploring pricing experiments, innovative packaging, and usage-based plans to drive revenue growth.”

Julian Freichel, Team Lead – Corporate Development

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