Credit managers have to be aware of the business environment their customers operate in, and to which extent certain economic and political developments might affect them and their ability to pay. To anticipate and determine customer-related risks and to protect the business within the economic climate of 2020 and beyond, a credit management team should consider the following five measures.
1. Leverage real-time data integration and hyper-connectivity: Real-time data is essential for credit managers, especially in times of rising insolvencies. To achieve this, the software in use must have the capacity to automatically retrieve credit rating data in real-time. Hyper-connected solutions integrate credit ratings directly into the credit scoring algorithm and connect the credit insurance processing to the customer database. This way, credit managers have sufficient visibility regarding their customer risk exposure.
2. Conduct customer compliance checks: Today onboarding a customer requires rigorous background-checks and anomaly screenings to ensure the integrity of the business network. Businesses need to check their customers against terrorist and embargo lists to exclude the risk that the customers are engaged in money laundering or have been identified as politically exposed persons (PEP). To ensure business integrity, credit managers also need to protect themselves with compliant processes, standards and codes of conduct and a secure IT infrastructure.
3. Emphasize experience: The concept of the experience economy defines that the experience actually is the product. Today, users are not merely looking for high-quality goods and services – they expect a unique experience and select brands that fullfill these
expectations. In O2C the goal should be to create a positive customer experience during onboarding as well as during billing, collections and especially dispute management. Technology can also ensure a high quality of communication and processing at every touch point throughout the O2C journey of the customer.
4. Leverage intelligent automation: Credit managers require intelligent automation, if they are expected to deliver solid and reliable credit decisions in a short amount of time. Capabilities they need include an automated determination of credit limit, credit score and risk category as well as an efficient approval procedure.
5. Think about services: Specialized services for finance operations enable businesses to move back-office activities to special service providers. Receivables can be easily managed as a service by outsourcing the process of matching incoming customer payments against open items and attributing remittance advice to payments too. Collection efforts take up a lot of time. Instead of conducting these themselves, collections experts can do the work for credit managers. Even credit scorings could be conducted as a service. This will free up highly skilled resources in the finance team from doing low value, repetitive, administrative work.
Overall, optimizing processes while leveraging services and technology can help ensure profitable and stable sales, even in an environment of economic downturn. A smart mix of best-practices, services and automation will determine the success of the credit
Serrala is a global B2B fintech software company. We optimize the Universe of Payments as we add efficient cash visibility and secure financial processes within all inbound and outbound payments for organizations. Serrala supports over 2,500 companies worldwide with advanced technology, intelligent automation and personalized consulting. Our comprehensive end-to-end portfolio
automates inbound and outbound payment processes as well as the management of related data and documents.
With offices in North America, Europe, Asia and the Middle East and over 600 employees, we are proud to be a trusted solution provider to customers of all sizes and in all industries. Visit serrala.com
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