It is a challenge in the new normal to manage credit risk and protect cash flow. The rapidly changing economic environment and its impact on the credit worthiness of customers makes it imperative that you stay ahead of the curve in credit risk management. Here are some tools you can use to manage credit risk and protect cash flow.
Credit ratings are available on apps from credit rating agencies such as Experian and TransUnion. It is easy and convenient to obtain credit rating information with credit apps. They are available online anywhere and anytime you need them, which provides the flexibility you need, particularly if you are working from a remote location.
Credit apps can also provide alerts for changes in credit rating information so you can be aware of new developments with your customers, and take action if necessary.
Trade reference information on customer payment history is an essential part of evaluating credit risk. Information on customer payment history is available from credit rating agencies or you can obtain it by contacting references directly.
Payment history information reported by credit rating agencies is easy and convenient to obtain online, but it has drawbacks. The information reported is often stale, and may not be reliable. In addition, the reports do not include the background information or nuances that you may obtain from calling a reference directly.
Contacting references directly can be very helpful, but it is time consuming and references need to be updated regularly for them to be useful.
Credit risk management tools for a new account begins with a credit application. The application should include all the information needed to make a credit decision, and establish credit terms and a credit limit. Credit risk management tools should be included in company information, bank and trade references, financial information and other relevant items. Your application form should also include any relevant information related to the cost of credit, and all associated fees if applicable.
Manual credit applications can take a lot of time for customers to complete, and more for your team members to enter in your system. As part of your onboarding process you should provide an online application. It will enhance your customer’s experience in dealing with your company, and increase the efficiency of the credit review process.
With automated credit management solutions you can provide your team with a dashboard for each account, which incorporates the key data needed to manage credit decisions. With the dashboard solution by Lockstep Collect, your collectors can see at a glance a customer’s account status, credit score, whether payment is usually late or on time, and by how many days. A color scaling used to rank credit quality will pop up when searching for a company in Lockstep Collect.
Tools are essential for managing credit risk and protecting cash flow. Automated credit management solutions provide the tools your team needs and free up time to be spent contacting customers to increase cash flow.
Lockstep Collect, a leader in cloud-based credit and collection platforms, provides automated solutions for effectively and efficiently managing credit. Lockstep Collect is an experienced software partner that can help you navigate the challenges of credit management 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.lockstep.io.