Is excessive overtime a financial burden for your credit department? Does your sales department complain about the length of time the credit approval process takes? Is your Days Sales Outstanding (DSO) higher than it should be because you don’t have enough staff to stay on top of accounts receivable?

As credit departments are being asked to do more with less and get it done yesterday, credit professionals need to learn how to expedite the tasks involved in managing financial risk, without curbing sales or putting the company’s financial health at risk. Automation is key to staying ahead of the game. You don’t have to automate everything in your operations all at once, but you do need to start.

Why manual processes must give way to automation

Credit risk management has come a long way from the days when a spreadsheet was the tool of choice. Even so, there are still companies that use outdated and inefficient tools and processes for analyzing the credit risk for extending credit to a certain customer. Credit professionals for these companies likely conduct extensive web searches, phone calls to references, and faxes and email communication from a variety of sources. These methods are time- and labor-intensive, prone to errors, and subject to discrepancies in how credit policy is applied. If this describes your credit department, it’s time to modernize. In other words, it’s time to automate.

Automation lets credit departments take advantage of the myriad of data that the internet has made available. You can easily integrate data from multiple sources and leverage that information across different departments in your organization. Automation allows companies to greatly enhance the flow of information, apply credit policies consistently, and reduce the risk of error. With manual processes, the credit approval process may take so long that the customer moves on or the salesperson loses out on the opportunity to cross-sell to the customer.

The hope and hype of automation

Automation is the future of credit risk management. Although it can benefit all aspects of the sales-to-cash cycle, automation still requires the assistance of expert credit professionals to derive its full benefits. Here are a few areas where automation can help credit managers provide the biggest return on investment (ROI):

  • Credit approval process — Automation makes more data available to increase the speed and accuracy of credit decisions. It allows online credit applications and e-signatures; consistent, standardized credit scoring rules; and real-time credit decisions. By automating the credit approval process, you reduce the costs associated with loan processing, and your credit professionals can spend their valuable time processing more accounts.
  • Invoicing — By automating your invoicing processes, you ensure invoices go out on time, find errors in invoices earlier, and optimize the payment cycle.
  • Collections — Automation tools can monitor your accounts receivable and provide both positive and negative notifications. Automation can improve the efficiency and effectiveness of your collections by notifying you when an account is 30 days or 45 days overdue so you can start the collections process earlier rather than later, and improve your chances of recovering the debt. Automation streamlines all your credit management processes, increases cash flow, and allows you to grow your business.

Automation tools to streamline your credit management tasks

If your company is ready to begin streamlining its credit management processes, one good place to start is with Experian’s suite of credit risk management tools. The tools will let you leverage customer data to make the best credit decisions, detect early signs of trouble, and grow your bottom line.

  • BusinessIQ — Analyze your account portfolio
  • Portfolio Alerts — Detect early signs of trouble within your account portfolio
  • Portfolio Scoring — Credit risk evaluation of your customers
  • DecisionIQ — Automated scoring customized to your specific needs

These portfolio management services provide control and insight into your accounts and help you make more informed decisions throughout the customer life cycle, from credit risk assessment to collections. MSCCM has partnered with Experian to bring you these valuable credit management tools. If you are ready to replace your manual credit process, give our knowledgeable credit professionals a call and bring your credit department into the automation age.

Need help managing your commercial credit risk? MSCCM financial experts can assist you. Contact us today.