Improving the management of your collections with the Virtual Accounts solution: discover ICF Habitat's testimony
Societe Generale launches a virtual account offer that allows companies in France to simplify their cash management by optimising the identification and the tracking of payments received. On this occasion, discover the cross testimony of our client ICF Habitat and Jean-François HAMANT, Business Manager at Societe Generale.
You are Head of Treasury and Finance at ICF Habitat. Can you tell us a few words about this?
Anaïs MARTIN: ICF Habitat, a subsidiary of SNCF, offers a housing solution to its employees who are eligible for social housing but also to other social housing applicants throughout France. ICF Habitat houses 208,000 people (2019 data), 30% of whom are railway workers, and manages a wealth of nearly 95,000 dwellings.
Can you explain what ICF Habitat's expectations were?
Anaïs MARTIN: As a lessor, ICF Habitat collects nearly 95,000 rents every month. These are mainly paid by direct debit, but also by bank cards, cheques, TIP and in cash. To support the changing practices of our lessees, who are gradually moving away from these last three payment methods in favour of more modern means of payment, we thought that it would be essential to be able to offer them the possibility of paying by bank transfer. One condition for this is that we should be able to easily and automatically reconcile the rent due dates with the payments received by bank transfer from our lessees.
While the management of collections is relatively easy for direct debits (by definition, debtors are clearly identified for this type of transaction), we could not say the same for payments by transfers for which we only had a more or less explicit description on the bank statement. Therefore, it was difficult to know who a transfer originated from without going through an often tedious and very time-consuming research phase for our teams. The payment by transfer thus remained confidential and we limited its development because of the workload generated.
"Our need was to be able to identify, shorten and, above all, automate our process of reconciliation of paid rents."
How did the implementation of virtual accounts go at ICF Habitat?
Anaïs MARTIN: We were looking among our banking partners for someone capable of implementing this innovative payment method we had heard about. As it turned out, Societe Generale was developing the VAM@SG solution. We chose to entrust Société Générale with the project and were among the first pilot customers. We were supported throughout the project by our Cash Management business manager and a team of experts who were very responsive and attentive to our needs.
In more concrete terms, Société Générale provided us with a series of virtual accounts ("VIBAN") that we allocated individually to each of our lessees. Integrating the virtual accounts into our IS and informing lessees is an essential step for the smooth running of our business.
We are delighted with our choice. The solution works properly, it is very reliable, less expensive than a payment by credit card in view of the rent amounts collected and our transfers are now automatically identified. It enables us to meet the high expectations of some of our customers, particularly the younger ones, without generating additional workload for our teams. We have opened a total of 100,000 virtual accounts.
Jean-François HAMANT: Any company with a need to automate its reconciliation processes is concerned, but ICF Habitat is an interesting example. Move-outs are part of lessees' lives and we can provide a very flexible response. Virtual accounts can be opened almost instantly after the arrival of new lessees and then closed again when they are no longer in use.
The moderate cost of implementation and operation as well as the improved productivity of the accounting and treasury departments makes it a highly relevant solution for companies seeking to optimise their cash management.
I would like to add that VIBANs files can be exchanged via secure host to host solutions: EBICS TS, SFTP or SwiftNet FileAct. Societe Generale also offers the possibility of customising the account name of the virtual accounts according to the company's needs.
What impact on the daily work of the teams do you perceive since the implementation of the VAM@SG solution?
Anaïs MARTIN: The improvements are tangible on several levels. First, in terms of operational gains. The automatic reconciliation of our payments by bank transfer considerably reduces the work of accounting teams and agency staff who were consulted in case of doubt, since payments received and invoices issued are automatically and immediately reconciled in our ERP system. The time saved allows the teams to concentrate on other value-added work.
Furthermore, we had implemented this solution a few months before lockdown and it proved to be very useful. At a time when all our agencies and caretakers were closing and mail was circulating slowly throughout the country, we encouraged our customers to turn to digital payment methods, including the identified transfer of course, which clearly helped to limit the impact on our cash flow.
"Payments received and invoices issued are automatically and immediately reconciled in our ERP system."
Finally, how do you see the future of your work together?
Anaïs MARTIN: Payment methods are changing faster than ever. We feel it is very important to constantly innovate to keep up with what our lessees can expect from us. We are very interested in the possibility for them to be able to pay their rent using instant payment. We would like to extend the VAM@SG solution to include Instant Payment. Since it has been very successful so far, we are ready to continue working together with Societe Generale even further.
Jean-François HAMANT: Yes, our teams are currently involved on the topic of instant payments. We should be able to offer the ability to integrate instant payments into the VAM@SG solution in Q1 2021. We will also develop the solution to integrate the payment method "Request to Pay". We would like to adapt the solution to upcoming changes in the payments world in order to successfully respond to our clients’ concerns.