Black lemon halves DSO after restructuring

Nicolas Poux, CFO at black lemon, implemented LeanPay within his team to manage payment reminders.

Before LeanPay

Payment reminders sent by email, followed by phone calls from the CFO

A high DSO of 60 days

Time-consuming management of an Excel file

After LeanPay

Payment reminders sent only by email (almost no more phone calls)

A DSO of 30 days

Intuitive management through a digital tool

‍

A restructuring agency facing an unusually high DSO of 60 days

The Paris-based event agency black lemon outsources its support functions to SMASH Group, which provides part-time back-office services across finance, HR and legal functions. Nicolas Poux works with black lemon in this context as Chief Financial Officer.

When Nicolas Poux began his assignment in summer 2019, black lemon was undergoing a transition. The company, which had previously experienced strong growth, was facing significant payment delays that were putting it under pressure.

“There was a lot of cash tied up. At the beginning, we carried out a major round of payment reminders, mainly by phone. Thanks to this, a large part of the outstanding invoices was recovered. Then the assignment paused for a few months and resumed in November,” explains Nicolas Poux.

At that point, he faced the same issue again: a large amount of outstanding cash and a DSO rising quickly.

Then came the COVID-19  crisis, along with a decrease in invoice volumes. Black lemon went through a complex period, notably with a legal safeguard procedure initiated in November 2020.

After a rebuilding phase, projects quickly resumed. From summer 2021 onwards, it became essential for the finance team to revisit accounts receivable management.

“At the time, the DSO was around 60 days, which is not normal for an event agency.”

DSO can be anticipated based on the billing structure:

• A 30% deposit is due upon signing the quote, meaning immediately
• A second 40% deposit is due within 30 days
• The final invoice (remaining 30%) is due within 60 days

The typical DSO for a project should therefore be around 30 days.

Another important factor: black lemon mainly works with large luxury groups such as L’Oréal, LVMH and Shiseido.

These customers have highly structured processes and tend to pay at 60 days. In addition, procurement departments negotiate more favourable terms, either by reducing deposit amounts or extending payment terms.

To manage these challenges, Nicolas Poux and his team built an Excel file to track payment reminders.

“We knew exactly where we stood in terms of reminders and the reminder level for each invoice. But it remained very manual and complex. As invoice volume increased (around 50 invoices at the same time), managing the Excel file became far too time-consuming and did not meet the need to get paid quickly and efficiently.”

The need for a debt collection software quickly became a priority.

“Our internal accountant initially reviewed some of LeanPay’s competitors. She found them interesting but was not fully convinced. That is when I started speaking with Socrate Tellier, CEO and co-founder of LeanPay. He contacted me on LinkedIn, and we had mutual connections. I had already been following what LeanPay was doing, so it was a good opportunity to test the platform.”

Nicolas Poux invited the entire finance team to test LeanPay themselves.

“The decision was unanimous: we were all convinced by LeanPay. Sometimes you look for a tool that does everything. For payment reminders, I just wanted a tool that does it well. That is exactly what LeanPay does.”

‍

Implementation completed in just two hours

Black lemon uses ProjEvent and ISACompta as its core systems. The most suitable integration method was automatic invoice data extraction via OCR technology, combined with a bank connection for payments.

“We tested it with a single invoice. The automatic reading worked well, and we imported all invoices under collection, around 40 to 50. The integration was very simple and error-free. We also performed reconciliations and found exactly the same outstanding amount as in our Excel file,” explains Nicolas Poux.

From that point on, the invoice process changed: each invoice is now sent to LeanPay via a dedicated email address.

“The integration was very quick and easy: it took just two hours. LeanPay is a completely seamless platform once your invoice history is imported.”

Nicolas Poux also highlights the usability of the platform:

“The LeanPay team is very available when it comes to support and training. But what is even better is that you hardly need any training. It is a clear and intuitive tool. Anyone can quickly get started. I use it all the time, even though it is not strictly my role as CFO. It is very engaging for tracking payments. I have real-time information that I cannot find anywhere else.”

‍

Results visible in just 2 months

Nicolas Poux is very satisfied with the rapid results: “Within a maximum of two months, I could already see the impact of LeanPay on payment reminders and especially on DSO.”

Reduced time spent on payment reminders

The time spent on payment reminders has been cut in half, both for operational follow-up and for sharing information between team members.

“Now, one person in the team handles it. You just need to go to the ‘Reminders’ tab and decide which actions to take. We have implemented automatic pre-due date reminder notifications a few days before the due date, and it works very well.”

“As CFO, I now almost never need to make phone calls to chase payments. Before, I regularly had to pick up the phone to get paid.”

A DSO divided by 2

Black lemon’s DSO is now around 30 to 35 days, meaning it has almost been halved.

Nicolas Poux shares his analysis:

“There are two explanations. First, customers are paying faster. Given our customer profile, there is a slight improvement in payment behaviour, but it remains limited. The second is the LeanPay effect. It accounts for the vast majority of the DSO reduction, by far, for two main reasons:

• The interface is very clear: it helps us know what to follow up on and when. Timing is just as important as the reminder itself.
• Reminder emails are visually more structured than a standard Gmail message with a white background and Arial font. LeanPay emails attract more attention. I now get responses from 7 out of 10 customers, compared to 1 out of 4 previously.”

A healthier aging balance

Nicolas Poux also observes a reduction in payment delays:

“Today, out of 100% of my outstanding amount, 25% of invoices are overdue. Of those 25%, 90% are less than 30 days overdue, 10% are between 30 and 60 days, and none exceed 60 days. Even though this reflects my current situation, it is also a pattern I see frequently, with a large share of non-overdue invoices. This shows that the reminder strategy is effective.”