Optimising Credit Management In The Order To Cash Process
Ar Credit Management
Having control over credit management within an order to cash (OTC) process is necessary to ensure smooth customer experience and successful business performance. comprehensive solution that manages customer accounts and associated transaction can ultimately drive financial wellbeing, reduce costs and increase bottom line profits.
Improving outcomes of an OTC process starts with an automated credit management solution that responds intelligently to risk profiles and customer trends. Incorporating credit management solution into an OTC system can provide significant economic benefits, and it can pay for itself through the avoidance of bad debts.
For executives that are looking for an OTC system, here is helpful step-by-step guide to find credit management solution that works best for their business needs.
Step 1: Identifying Your Needs
It is necessary to identify specific use cases and determine which credit isystem capabilities are best-suited to your order to cash process. Consider which customer types to include and how they should be managed, by defining the customersegmentation and structuring the credit management levels accordingly. Allocating different credit limits to customers depending on their credit history and payment behaviour can help reduce risk for the company, as well as assigning each customer unique risk rating to determine the DSO (or ?Days Sales Outstanding?).
Step 2: Research Potential Solutions
Now that you have clear understanding of your business needs, it is essential to be aware of the various OTC solutions available on the market and which features they offer. Assess the features of the solutions and determine what best suits your requirements. Pay particular attention to the functionality of the system and vendor?s level of customerservice and technical support.
Step 3: Think About the Future
It is recommended that you choose an OTC system that can easily scale as your business grows. An OTC system that can be integrated with other systems, such as your ERP or CRM, is preferable, saving you time and resources. As the number of customers increases, you may need to think about scalability such as automating the credit review process, update customer files efficiently and increase capabilities to include payment channels.
Step 4: Complying with Industry Regulations
Certain regulations within more complex sectors, such as finance and insurance, require tracking credit histories and providing customers with notifications and consent forms to manage their data. It is then important to choose an OTC system that is compliant with relevant regulations and produces the appropriate reports and notifications.
Step 5: Implementing Credit Management
The implementation of credit management system should be done with the assistance of knowledgeable provider who can ensure the system is integrated with other relevant processes, such as those involving collection and disputes. Having provider that offers ongoing maintenance and personalised support is essential as it will ensure the system is optimised as your business expands.
Conclusion
In summary, selecting the right credit management solution for your OTC process should be carefully considered process. Identifying the features and regulations that you need to comply with will help you to focus in the right direction. Then, through thorough research, you?ll be able to select provider capable of meeting your specific needs and offering level of support and flexibility that suits your business.
