Treasury Today Country Profiles in association with Citi

Brembo

Best AR Solution Highly Commended: Brembo SpA

Photo of Giusy Gamba, Giancarlo Cicuttini, Sara Longaretti and Roberta Palese, Brembo S.p.A

With a completely manual credit collection booking process, automation was the obvious answer for the Italian manufacturer of automotive brake systems, Brembo. Here is how it achieved some considerable savings.

Photo of Giusy Gamba, Giancarlo Cicuttini, Sara Longaretti and Roberta Palese, Brembo S.p.A.

Giancarlo Cicuttini

Group Treasury and Credit Manager

View biography

Brembo S.p.A. is an Italian manufacturer of automotive brake systems, especially for high-performance cars and motorcycles. With sales all over the world, it achieved revenues in 2017 of €2.5bn.

How one brake systems manufacturer made savings by automating its credit collection and booking process

The challenge

In Brembo, credit collection booking was completely manual. The AR department (a team of seven) printed details of collections (such as invoices, and credit and debit notes) from e-banking and customer advice notes. The information was then manually booked into the ERP system, the relevant documentation then being closed manually before being stored in a paper archive. This process took up 30% of the AR team’s working day.

The solution

Working with Piteco, an Italian financial software and consulting firm, a joint finance and IT project team was set up to analyse the entire process. The aim was to map and categorise each step and learn which activities could be automated.

The assessment confirmed the least efficient areas as the manual booking of bank income with paper-based bank documentation, and the manual booking of invoices using printed payment advice, details received by email from suppliers and bank statements.

A solution was provided for each issue. Printing bank details from the e-banking system was resolved by automatically importing electronic bank statements to enable collections to be automatically booked in the ERP. Where payment advice notes were delivered in any other format such as a customer email, this information can also now be stored digitally.

The manual booking of collections into the ERP was resolved digitally. Following analysis and categorisation of payment advice notes received by customers in PDF, TXT or CSV formats, all are now converted into a standard electronic format. This enables AR to automate the matching process between payment advices received, customer account balances, and bank income statements.

Rather than print transactions that have been booked in the ERP, and manually storing them in a paper archive, all receipts recorded on electronic bank statements are identified and reconciled using a unique reference number. This enables the identification of every closed customer invoice in the ERP, connecting it precisely with the relevant bank record noted on the account statement, avoiding the need to print supporting documents for storage.

Where reconciliation of collections was manually booked with electronic bank statements, errors were sometimes made. Now bank income is automatically extracted from electronic statements, removing that risk.

Brembo now has automatic booking of collections and paperless processes, reducing the risk of error. The time saved thanks to this implementation is dedicated to more value-adding credit management activities.

Best practice and innovation

Each year Brembo manages around 8,000 collections involving around 80,000 documents, such as invoices and credit notes. This solution facilitates full automatic reconciliation of around 80% of these, equating to about 64,000 documents. This represents a 43% time saving on booking collections. This translates into an estimated saving for its seven AR specialists of around 1,440 hours each year.

This project will now be extended to all Brembo group entities. The estimated saving on booking collections for a worldwide implementation is around an additional 2,500 hours. What’s more, as the model has been built on a multi-entity basis, there will be zero additional costs for future implementations. The project’s sustainability credentials are clear too: so far, the project saves around 24,000 sheets of paper per year. When the project is implemented in all Brembo group subsidiaries, there will be an additional saving of around 44,000 sheets per year.

Key benefits

  • Automatic reconciliation of around 80% of all collections documents.

  • AR specialists saving 43% of time on booking collections focusing on more value-adding credit management activities.

  • An estimated 1,440 hours saved for seven AR specialists in a year.

  • Estimated hourly saving for a worldwide implementation is 2,500.

  • Around 24,000 sheets of paper saved per year: additional around 44,000 on global roll-out.

  • Zero additional costs for future implementations.

Portrait of Giancarlo Cicuttini

Giancarlo Cicuttini

Group Treasury and Credit Manager

Giancarlo Cicuttini is an experienced Group Treasury and Credit Manager at Brembo SpA with a demonstrated history of working in the automotive industry. Skilled in negotiation, business planning, analytical skills, risk management and banking. Giancarlo is a strong finance professional with a Business Administration focused in Financial Intermediaries.