Faster payments and improved cash flow
Now, LVMH Italia enters all information about planned trade marketing activities into a K2 workflow-based application. K2 passes the plans for each activity to the relevant department for authorization and then, during the promotion period, instructs an employee to visit the relevant store to verify that the marketing activity has indeed taken place. At the end of a verified activity, the K2 process automatically creates a proforma invoice for the retailer with all the correct references and invoice information. When retailers then submit these pre-approved invoices, LVMH Italia can pay them without delay.
This streamlined K2 process saves time for LVMH Italia’s employees while enabling the company to improve retailer satisfaction. Critically, the K2 process has also improved the company’s cash flow, as retailers no longer have any reason to withhold their own payments to LVMH Italia. “Thanks to the K2 process, the overall situation for trade marketing payments has improved significantly,” says Mario Trovato, IT Manager at LVMH Italia. “We improved our DSO (Days Sales Outstanding) by one day on average every month, which translates to about €250,000 to €300,000 less in credit, which has a positive financial impact.”