The rapidly changing business environment in the new normal has made it more important than ever to continually monitor customer creditworthiness. Under normal conditions, many companies only reviewed customer creditworthiness on a quarterly or annual basis; unless they hit their credit limit, changed payment habits for the worse, or something else major happened. Today, this approach can leave you exposed to more credit risk than your company can afford. Customer creditworthiness needs to be monitored on a continuous basis, so credit limits and terms can be adjusted as necessary to minimize bad debt losses.
Lockstep Collect has credit management solutions which can help you continually monitor customer creditworthiness including:
Customer Credit Dashboard
The credit dashboard conveniently displays the information your team needs to monitor creditworthiness including:
- Custom credit score – based on factors that are the best indicators of your customers’ creditworthiness
- Payment habits – whether an account pays late or on time and by how many days
- Days past due
- Available credit
- Credit agency scores – D&B, TransUnion and Experian
Color Scale Ranking of Credit Quality
Five credit score rankings in color from Very Poor (red) through Poor (red), Fair (orange), Good (green) and Very Good (green), which pop up when searching for a company. This provides an easy way to identify accounts with higher credit risk for credit review.
Alerts can be programmed for important credit factors such as:
- Customer on credit hold
- Average days late now more than X
- Change in credit score
With the rapidly changing business environment making it difficult for credit reporting agencies to provide up-to-date information, it is also a good idea to pay close attention to economic news of changes that may affect your customers and the industries your company serves. Companies in heavily impacted industries may need to have credit limits reduced.
Credit limits are very important, but should be only one of the tools you use to monitor and control credit risk. If credit limits are set too low to avoid bad debt losses, your team will be needlessly tied up reviewing and releasing orders on credit hold. Conversely, if they are set too high, you risk exposing your company to avoidable bad debt losses. With automated credit solutions you can continually monitor customer creditworthiness, and adjust credit limits and terms when you detect that a customer’s credit profile is deteriorating.
Lockstep Collect, a leader in cloud-based credit and collection platforms, provides automated solutions for managing credit. Lockstep Collect is an experienced software partner that can help you navigate the challenges of credit risk in the new normal.
If you would like to learn more about how you can benefit from automated credit management solutions, please contact Lockstep Collect at www.anytimecollect.com.