Optimizing Credit And Collection Processes With Automation: A C-Suite Executive’s Guide
Credit And Collection Automation
The transition to digital technologies has transformed business operations in myriad of ways, offering enterprises unprecedented visibility and agility at all levels. This principle is particularly relevant when evaluating automated solutions for credit and collection processes in the order-to-cash cycle. Modernizing or replacing existing credit and collection operations can bring about substantial efficiency improvements, streamlined data flows and substantial reduction in labor-intensive manual processes. In this guide, executive-level decision makers will gain comprehensive grasp of how automation solutions can revolutionize their credit and collection process.
Overview
Credit and collection is an essential component of ?order-to-cash? activities, accounting for some of the largest sources of inefficiency in back office financial operations and often resulting in cashflow problems. Automated solutions pair the speed and accuracy of computers with the human inputs required to protect net receivables while maintaining customer relationships. Through analytics and rule-based programming, credit-collection process automation makes it possible to react quickly to potential problems and optimize current processes to reflect changing needs, leading to reduced administrative burden, faster collection and improved accuracy.
Performing Credit Risk Evaluation
At the heart of automated credit and collection processes is credit risk evaluation. This is an assessment of customers ability and willingness to pay their bills on time. Automated credit management tools use credit data to identify risk and flag customers who manage their payment cycles more slowly. Through advanced analytics, automated decisioning systems can rapidly provide reliable estimate of the likelihood that customer will pay off their debts based on existing credit risk models and statistical analysis of current and past customer performance.
Benefits of Automated Credit and Collection
Incorporating automated credit and collection processes can help streamline financial operations and reduce receivables-related issues. Automated solutions allow enterprises to establish credit limits for their customers and improve their capability to detect and prevent fraudulent or suspicious activities. They also permit faster and more sensitive responses to fluctuations in payment history and enable companies to quickly modify their workflows and policies to make sure customers are treated fairly. In addition, tracking customer accounts in real-time eliminates the need to perform batch processing and improves accuracy of reporting, slashing the time and effort needed to reconcile customer accounts.
In many cases, automated credit and collections can generate substantial cost savings as well. By reducing the time and resources needed to perform receivable-related activities, automated processes reduce administrative burden and enable companies to focus their attention on high-value activities rather than on tedious, repetitive tasks. And by flagging delinquent accounts in timely fashion, business can reduce workloads associated with chasing past due payments.
Selecting Solution
When selecting an automated solution for credit and collection processes, executive-level decision makers should look for comprehensive, ?end-to-end? systems that enable them to gain comprehensive picture of their order-to-cash processes. The key features to look out for should include:
? Automation Decisioning Automate key tasks in credit and collections processes with configurable rules that can be adapted as an organizations needs change.
? Credit Risk Evaluation Analyzing customer data to detect credit risk, identify slow-paying customers, and allow organizations to develop proactive strategies to address late payment issues.
? Increased Visibility Providing real-time dashboard on customer accounts, receivables and due payments to quickly pinpoint areas where processes may need to be revised for better performance.
? Data Integration Supporting seamless integration of customer and supplier information from multiple sources so data can be leveraged from various activities across the order-to-cash cycle.
? Reporting Analytics Optimal insights on key performance indicators through granular and interactive reporting capabilities.
Conclusion
The proliferation of automated solutions for credit and collection processes provides unique opportunity for enterprises of all sizes to reduce costs, streamline processes, and drive efficiency across their order-to-cash operations. By leveraging the latest technologies, executive-level decision makers can build reliable, accurate foundation to streamline their order-to-cash processes and bring gains in efficiency and cost savings in their business operations.
