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The Evolution of Credit

December 01, 2017
By Rimilia

Credit management is a key business process for every organisation. Even though there are many different ways to manage the process, it business as usual to every organisation that grants and recovers debt when it’s due.

Where in the past there has been a relatively set process for collecting debt and managing credit, there has been a shift in recent years as credit management is evolving inline with technological advances.

Credit Management in the past

Recent reports show that companies lacking appreciation and focus on turning sales invoices for work/services provided into cash are suffering and falling into difficulties.

Whilst more successful businesses have managed to realise the importance of good cash flow and often ask themselves how much cash is available by turning debtors into cash, they are still failing to invest in technology that can improve the results.

Many organisations are restricted because of the system they use that determines the process of credit management. Or in some cases, the lack of systems that is held together by the hard work of committed staff who make it work despite the technology they use.

At a recent credit event, the question was asked: “What are credit professionals using to manage debtors?”

The overriding result was Microsoft Excel/spreadsheet tools, in which a number of workbooks combined with the ‘dunning’ processes of the ERP system seemed to be the common process. 

The answer seemed to be based around maximising segmentation, which started a further debate as to how difficult it is to manage so many items of data on customers from different sources, all in real time.

This lead to the further realisation that one of the challenges of workflows in many systems is that you need to go through one gate to get to the next one. Effectively, the workflows are ‘dumb’ in that they don’t treat each debtor differently.

At a time when customer satisfaction is a key factor in the service or goods provided, the credit control department aren’t getting the opportunity to maximise cash optimisation with the current systems and processes in place.

The new world of credit management

When processes can be identified as inefficient, something has to change, and that’s what’s happening in credit management.

Old processes that have been in place for too long and couldn’t be replaced in the past are now seeing alternatives come into the market, thanks in part to technology.

As technology and software has advanced, credit management has been advancing with it. First there was spreadsheets to replace paper, now there is software as a service and AI.

For credit professionals, there are now credit management solutions that offer new and interesting ways to manage customers and their indebtedness.

Here are 3 ways cash collection software can make an Impact:

  1. Dunning can be brought up to date using a number of flexible customer strategies that allows the timing of dunning activity to be dynamic replacing the tedious workflow process from the past

  2. Data can be pulled from multiple sources, for example: credit reference agencies, credit insurance and DBT. 

    This gives a full view of a customer in one place rather than the information being spread across numerous spreadsheets and valuable time being spent by someone collating all of the data to then distribute (which often means data is out of date by the consumption of end user).

  3. Rimilia’s Alloc8 Collect uses intelligence from payment trends to predict when customers pay, increasing efficiency and transparency of payments.

If you can provide your team with a solution that allows them to work in a different way, maximising their time and output, you have an opportunity to optimise the results.

Alloc8 Collect offers an opportunity to replace old credit management processes with an intelligent system that can predict customer payments, gives credit professionals time to work on higher-value tasks and can offer a great ROI.

Learn more about Alloc8 Collect and how it’s helping evolve credit management processes.

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