The Importance of Credit Control and Management
Poor credit control management is a common issue that can lead to business failure. This problem arises when businesses experience late payments, resulting in negative cash flow and the inability to pay staff or suppliers on time. Therefore, a solid credit control procedure is essential for any business, regardless of size, to ensure timely payments.
Why Are Credit Control and Management Important?
Frequent late payments and defaults can seriously threaten a company’s financial stability. If left unaddressed, these issues can be costly, as one in every five small-to-medium enterprises faces bankruptcy due to customer payment defaults. Consequently, minimizing these occurrences is vital for the survival of the business. By implementing effective credit management, businesses can ensure that they receive the revenue they are owed, which, in turn, supports long-term success.
Making a Credit Control System Work
Creating a customer-friendly credit control system is crucial for increasing the chances of receiving timely payments. Additionally, utilizing credit control and credit risk management tools can help businesses manage late payments and debtors more effectively, which ultimately improves cash flow.
1. MA!N by Ce-it
MA!N provides a comprehensive solution for dispute management and invoice collection. By automating routine tasks, the system allows businesses to focus on exceptions. In addition, the collections management module streamlines the collection process, which results in faster invoice payments. The system monitors customer payment history to assess payment timeliness and takes appropriate actions based on predefined algorithms. Moreover, communication is simplified by enabling the sending of letters, emails, and SMS messages with just a single click. Customers are also segmented to ensure personalized treatment. Furthermore, MA!N includes a credit risk management module that provides insights into potential risks by utilizing both internal and external data. The integration of custom scoring models and debtor management further enhances risk management.
2. Sidetrade Credit Risk Management
Sidetrade’s Credit Risk Management module offers greater control over customer risk profiles, helping businesses make informed credit decisions. This module provides a comprehensive view of credit portfolios with real-time updates on credit changes. As a result, it enables effective risk monitoring, alerts for potential issues, and customized actions for teams. Businesses can also perform credit checks, set customized credit limits, and manage insurance guarantees. Additionally, the system helps mitigate potential disputes and directs collections efforts by consolidating payer profiles, financial data, and credit insurer guarantees.
3. PDM Software
PDM software, developed by Outstanding Solutions, retrieves invoice data from accounting systems to create a database reflecting the status of each invoice. By using workflow tools, the system generates a credit collection inbox that creates customized lists, helping collectors prioritize and complete tasks in the proper order.