Craft Collective is an emerging, young wholesale beverage distributor on the East Coast. We recently published a case study about its use of Esker’s Collections Management tool after talking with founder and CEO Adam Oliveri. Below is an edited version of our interview.
Esker: Adam, thanks for joining us on the call today. Let’s start off with a bit of background. Could you tell me a bit more about Craft Collective, your role in the company and the mission behind it?
Adam: Sure. I’m the founder and CEO, and we break things down between myself and my co-founder, Brian, between internal and external things. He handles all the marketing and sales aspects of the business, and I handle a lot of the internal and physical operations for facilities and warehouse and all of that. So, AR (accounts receivable) ends up being something I oversee as well.
At the most basic industry categorization level, we’re a wholesale beverage distributor. Brian and I are long-time friends that went to college together at the University of Rhode Island. We were both doing different things in different industries, but always wanted to start something together. Brian and I are both passionate about the craft beer industry and culture, and the brewery scene was starting to really emerge in the late 2000s and early 2010s. We saw an opportunity to start a business that provided services to breweries in a segment that wasn’t really being provided by traditional distributors. Craft Collective has been in business now for almost five years, and we have around 60 employees with us.
Esker: That’s awesome Adam, congratulations! Now, if you could take us back to the beginning when you started searching for an automation solution. What was your manual process like before Esker and some of the challenges that you were experiencing?
Adam: Virtually all of our payments prior to using Esker came in through checks that were either mailed or held for pickup at a physical location for our salesman. We had customers that would wait until the day that the invoice was due to actually mail the check, which meant we wouldn’t get paid on time. Checks got lost in the mail from time to time or customers would say that they mailed a check to us — holding them accountable to that wasn’t really possible.
On the customer pickup side of things, they’d write a check and hold it there as leverage to get the salesman to come in. It had us going places that it really didn’t make sense for us to go for sales or service purposes.
Basically, it always took longer than it should have to get paid. And we had to put more resources into that area than we should have needed to in order to deal with the volume of payments that we were handling. Up until about two years ago, I was still opening all the envelopes on my way home in my truck. That was fine when it was daylight out when I was going home, but it would get a little hairy when I was driving home at night and stacking them on the dash there. You’re saving lives as well here!
Esker: Hey, well that’s a new benefit for us! Haven’t heard that one before. But yeah, that all sounds really tedious.
Adam: Yeah. It was a lot for one person to do who had many jobs. But now a good portion of our payments are coming through Esker, so it alleviates the pressure a little bit. We get paid faster, and it’s more convenient for some of our customers who are a little more forward thinking or who don’t have the cash pressure on their end that causes them to play all the kinds of games that a check-oriented payment process allows for.
Esker: How has Esker helped with these issues?
Adam: There were two major things that interested us in using Esker. The first was the portal where customers could log in and see their invoices, ask questions and interact with staff in a way that is much more manageable and trackable than email. And then the second was the ability to actually pay those invoices, schedule them and do all activities related to actually moving the money.
Customers are interacting with us through the portal, asking questions and requesting copies of things that they don’t have or downloading copies of things that they want to have. We are sending messages to customers through the system about late invoices or invoices that are approaching a period that the state considers to be delinquent in this regulated industry. The portal gives people an option to pay those potentially missed invoices more quickly, which is just a better experience than stressing them out about getting us a check.
Accepting payments through the portal has caused our day sales outstanding to go down, and there’s just a bit more flexibility there in terms of the payments that come through ACH. In our industry, our customers are bars and restaurants and things like that, and they bounce checks a decent amount as a category. ACH transactions just have less risk associated with them, so we have less money held up in that limbo stage. Having Esker has also decreased the number of customers we’ve had to put on the delinquency list.
Esker: What do you mean by “delinquency list”? Can you explain that a little more?
Adam: If a customer is past due on a certain date, the state considers them delinquent and they have to be sold to on COD (cash on delivery). I think about half of the time a customer reaches that delinquency stage is because they just lost or misplaced a paper copy of an invoice and then failed to pay attention to any of the three to five follow-up situations after that. Nonetheless, it happens. The biggest problem that situation creates is that it causes our customers to question their relationship with us. And we lose customers if the salesperson can’t navigate that interaction well. Because nobody wants to take blame for anything, they just point fingers. And oftentimes the finger gets pointed right back at us when we have to put them on that list. It’s not a good place to be in, and we certainly want to avoid it. Esker has helped us to avoid that.
That actually brings up another benefit that we’ve noticed, which is that the sales reps are less stressed out about AR than they were before. Prior to Esker, anytime there was an issue with payment or a check needed to be picked up or something, the salesperson would have to be on top of it alongside their other selling responsibilities. Now there are less instances where they need to get involved and less problematic AR situations that are tying up our salespeople’s time.
Craft Collective processes roughly 200-300 ACH payments a month through Esker. The company has seen improved relationships with customers, better staff productivity, and decreased stress among its sales staff as well. Learn more about all the benefits Craft Collective has seen by checking out the full case study here.