Credit Management Software: How to improve cash flow through automation

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Improving cash flow with credit management software

Credit control teams work tirelessly to ensure that processes and procedures are adhered to so that cash flow remains consistent and the cost of debt recovery is reduced. However, this is a time consuming, error prone and costly process. Organisations that have automated their credit control procedures by using credit control software claim that debtor repayment cycles have reduced by at least 2 weeks and the costs associated with this activity have been slashed by around 80-90%. Consistent cash flow is the life and blood of any organisation, so how can you dynamically monitor and enforce credit control processes?

Factors that weaken credit control processes

One of the major factors within any organisation’s credit control system is that of entrusting procedures and tasks to employees. This means that an SME can instantly become vulnerable to costly errors surrounding human intervention. People make mistakes, become ill, take holidays or leave the company for new pastures.

Common factors that weaken credit control processes include:

  • Personnel movement or absence
  • Sales teams applying pressure on credit control teams to lighten credit limits
  • Absence of staff at a client site which is responsible for authorising payment of invoices
  • Economic events within your marketplace

The inconsistency of constantly passing manual processes to new employees or operators will, overtime, dilute credit control processes and procedures.

How to improve cash flow with credit management software

The automation of credit control processes can offer a significant advantage over manually operating systems. Business process automation not only provides accurate and timely debt chasing but it can also assist in automatically notifying associated personnel of impending and important dates.

It’s no surprise, therefore, that credit control automation can significantly improve cash flow. It can also tighten control over credit limits and overdue invoices, eliminating the need for employees to operate the accounting system.

Benefits of credit control automation:

  • Automated creation and distribution of credit control communications to exact business rules and procedures
  • Automated letters can also be included within workflow authorisation processes
  • Customer credit limit workflow authorisations to improve decision making when placing clients on hold, receive a bad credit communication or have a credit limit amended
  • Integrate financial software with online data services so that credit limit decisions are based on the very latest information
  • Automatically inform non-finance team employees of credit control status changes via email or SMS or a CRM account record update

Is credit control automation right for your SME?

It’s highly unlikely that aged debtors will disappear overnight. As a result, the challenges facing Finance Directors must be to reduce the problems and costs associated with debt retrieval.

Currently, too much reliance is placed upon employees to manually go through debt retrieval stages which can prove to be extremely time-consuming and costly to SMEs of all sizes. This is why credit control professionals are turning towards business process automation technology to alleviate the burden of administrative procedures and maintain a consistent and professional relationship with trading partners and customers.

Summary of credit management software benefits

  • Reduced operational costs
  • Reliability and consistency in controlling debtors
  • Employee time is freed from time-consuming activities
  • Improved decision making
  • Effective monitoring and reporting

For more information on how Codeless Platforms’ BPA Platform can automate credit control processes, download the Credit Control Automation eBook below, or call us on +44 (0)330 998 8700.

eBook: Improving Cash Flow via Credit Control Automation

eBook: Improving Cash Flow via Credit Control Automation

Discover how automating credit control processes removes employee errors from repetitive administration, reduces aged aged debtor times and improves company cash flow.

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