Digital solutions provide convenience for Comfort

What can a physical and, in many aspects, analog industry like the plumbing and HVAC sector gain from digital solutions? As it turns out, quite a lot. Especially for Comfort, which is Sweden's largest plumbing and HVAC chain.

The Comfort chain was founded in 1972 with a focus on selling bathroom products in their stores. Over the years, both the company's name and focus have evolved. In 2005, the two medium-sized chains, Comfort and Reko, merged, resulting in one of the market's leading plumbing and HVAC companies. With over 1,800 certified installers and approximately 120 independent member companies, including 65 stores, Comfort is now Sweden's largest chain in the plumbing and HVAC installation sector. They sell everything related to bathrooms, water, heating and energy locally across Sweden and online. Additionally, the company offers installation, servicing and maintenance, along with advice on heating solutions and energy optimization.

When it comes to optimization, with so many member companies and a constant stream of invoices, having automated and streamlined business processes is of critical importance. This is where digitization and Cepheo come into play for Comfort. Hans Spett, the company's IT and logistics manager, explains what the digitized collaboration with member companies looks like:

"You could say that our main task, working centrally, is to support our members with everything from procurement and campaigns to IT and system support. By coming together, we achieve greater volume and better purchasing prices. Fundamentally, it's about providing benefits and increased profitability for each individual member. Previously, members were shareholders in Comfort and regardless of the size of the member company, they had one share and one voting right. From January 2022, we changed our structure, and now companies can either be pure members without ownership or sell their business to Comfort Group and continue to operate the local business as an independent subsidiary of Comfort."

Internal projects with external benefits

Deciding to adopt and implement a financial system can be challenging enough. However, finding a partner can be even more difficult. With approximately 700,000 products and around 50 suppliers, it is essential for Comfort to maintain a solid structure and have clear visibility into their performance in terms of quality and sales. In 2013, the company initiated the "Grundplattan" project with the goal of ensuring better-quality goods from its wholesalers and gaining better control over the products purchased by its members. Cepheo assisted Comfort in realizing this project through consultations and the implementation of technical solutions. The back-end activities of "Grundplattan" were run on Microsoft Dynamics AX 2012 in combination with a data warehouse.

After Comfort, with Cepheo’s help, migrated from Dynamics AX 2012 to Dynamics 365, the company decided in 2019 to further streamline transactions within the organization. This decision was motivated both by the need to have better overview of all members' purchases to enable Comfort to assist them more efficiently and by the increasing number of invoices and transactions. Internally, the project is referred to as "Betalingsansvar."

Hans explains, “Project Betalingsansvar means that we take on the payment responsibility when members place orders with our contract suppliers. They place orders directly with the wholesaler, who, in turn, sends the order to the member, but the invoice comes to us. We then assume the payment responsibility, pay the supplier and then invoice the member. Member companies are entirely independent, and they do not place orders through us, but we handle framework agreements and payment responsibility. We require both contract suppliers and members to be able to send and receive EDI invoices.”

Efficiency gains with EDI invoices

So what is an EDI invoice? Simply put, EDI (Electronic Data Interchange) can be seen as an upgrade from PDF (Portable Document Format). While a PDF is just a more or less arbitrary digital format that serves as a digital paper invoice, EDI, on the other hand, consists of structured data in an agreed format that reduces the risk of errors in orders, order confirmations and invoices. EDI also provides a more secure way to send and receive invoices while digitizing and streamlining the invoice processing. To make it easier, you can call EDI an "E-invoice.

Hans continues, "A positive effect of us paying the suppliers' invoices, and members paying us, is that we can see if a member is falling behind on payments. This sets off a little alarm for us. What is the issue? Does the member need support or something else? Today, we can step in and assist faster than when the member had a business relationship with the supplier and not with us. Having better control over the finances of our member companies than before is a crucial part of Project Betalingsansvar and is of great benefit to the entire chain."

Large volumes always entail the risk of errors that require manual handling. The important thing is that, instead of constantly supervising the flow, you can focus on quickly resolving the few errors that occur. Before Comfort sought the help of Cepheo to develop and implement its fully automated invoicing system, including EDI between suppliers and member companies, invoices could slip through and cause problems on multiple levels. With Comfort's digitized process surrounding the invoice flow, where everything is now in the cloud, this no longer happens.

"We handle approximately 16,000 incoming and outgoing invoices a week, and it all takes place with very little manual work. Now, as we are such a large chain that manages such large volumes of invoices and has so many transactions with our member companies, we need an automated invoicing process and stable, long-term system support. We get that with this solution using EDI, based on Dynamics 365 and thanks to the collaboration with Cepheo," says Hans.

The benefits of a central, cloud-based, and stable solution are that management automation has significantly improved, allowing the allocation of both resources and funds to other areas. Hans gives examples of some clear administrative efficiency gains that Comfort has enjoyed in recent years:

"In addition to not needing a person to handle the invoices manually, we have also been able to outsource the financial task related to payment responsibility. The company we collaborate with is located abroad, where they handle all accounting and bookkeeping directly in our system."