Since new methods of credit management can take more time than simply checking a credit report, there are tools that will help to make this job easier. There are a few different tools available to stay on top of your customers’ potential credit risk and using them all together will help to protect your cash flow.

Credit Apps and Services

Credit ratings are available on web or mobile applications from credit agencies such as Experian and TransUnion, making it convenient to obtain credit information. They are available online anywhere and anytime you need them, which provides the flexibility you need, particularly if your team embraces remote or hybrid work models.

Credit apps can also provide alerts for changes in credit rating information so you can be aware of new developments with your customers, so you can take any necessary action.

Important Note: Payment history information reported by these agencies is convenient to obtain, but it has drawbacks. The information reported is often dated and may not be reliable in today’s fluctuating market. These reports also do not include the background information or nuances that you may obtain from calling a reference directly. There are risks and rewards to using business credit reports. They should be just one of the tools used to manage credit risk.

Trade References

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.

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 Applications

Credit risk management for a new account begins with a credit application (not to be confused with the Credit Apps, above). The application should include all the information needed to make a credit decision and establish credit terms and a credit limit. It should include 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 applicable fees.

Manual credit applications can take a lot of time for customers to complete, extending the time for your team members to review and extend terms. As part of your onboarding process, you should provide an online application. It will streamline the process for your customer and make it a more efficient 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. This should include the customer’s account status, credit score, whether payment is usually late or on time, and by how many days.

Utilizing enhanced tools is essential for managing credit risk in 2023 and beyond to protect your cash flow. Leveraging a combination of credit apps, streamlined online applications and automated credit management solutions, like Lockstep Receivables, provide the tools your team needs to free up time on more value-add accounting functions.

Leveraging Tools and Technology to Monitor Credit Risk

Monitoring credit risk is done more efficiently and effectively with automated credit and collection solutions. Sage AR Automation has a number of solutions which can help you monitor credit risk including:

  • Custom Credit Scoring Model: Calculates credit score based on values and weighting assigned to factors you think are the best indicators of your customers’ credit quality.
  • Dashboard Reporting: With a glance your team can see a customer’s account status, custom credit score, days past due, available credit, D&B, Experian, TransUnion; and whether the account usually pays on time or late and by how many days.
  • Automated Customer Communications: Automated emails or text reminders based on the status of customer invoices.
  • Activity Management with Smart Activities: Prioritizes activities for your team based on account information.