3 Ways Traditional Credit and Collection Processes Fail
In order to move into the digital age, credit and collection processes need to evolve with the changing times. Traditional credit and collection processes are no longer standing the test of time. These outdated credit and collection processes are not going to streamline growth for a company looking to decrease days sales outstanding and increase cash flow management.
CreditPoint Software has been at the forefront of automating credit and collection processes for more efficient productivity. Manual processes eat up valuable time and collection agencies can help, but they keep 25-50% of the payout for themselves. Let’s dive into just how outdated traditional credit and collection agencies fail below.
1. Employee Productivity
Manual credit and collection processes are time-consuming, increase employee frustration, and decrease productivity. As more and more manual applications are requested, your credit analyst is inundated with mountains of work, which creates a stressful work environment. Traditional manual processes do not result in poor decisions, they are just manual and take more time.
Today, businesses need a new, more effective model for the collections department. One that is less dependent on growing headcount and manpower and is more focused on finding new ways to implement efficient workflows and boost employee productivity. Such a system should provide financial executives and departmental managers with greater transparency into the collections function and the intended outcomes. This includes simple access to view multiple collections strategies and make recommendations/modifications accordingly. This streamlines operational efficiencies and improves productivity while lowering operating costs and increasing cash flow..
With an automated credit and collection system, your analysts are able to save roughly 60% of their time thanks to CreditPoint Software’s highly-configurable automated solution.
2. Eliminating ERP for Collections Processes
Some of the largest ERP vendors depend on third parties to incorporate the collections function into their systems, while other ERP vendors offer their own homegrown applications with limited capabilities. Generally, these do not support all the functions needed to manage collections in today’s highly complex business environment. Traditionally, due to these limitations, using your ERP for collections activity becomes a cost center.
While this approach may address short-term needs, it opens up greater opportunities for high cost of integration and customization while not solving the underlying issue of aging invoices. With the goal to close this gap, an automated credit and collections process will allow for a systematic structure to client data in a secure, private database. This information will remain centralized and accessible 24/7/365 for your analysts to refer back to and ensure information is updated on time and correct.
3. Effect on Customer Service and Future Business Relationships
The lack of greater transparency into the collection process and performance, coupled with decentralized information and the lack of a formal dispute resolution process, creates the perception that an enterprise organization is out of touch. As a result, the lack of effective collection tools, processes, and systems has a direct impact on customer service and the potential for future sales with those customers.
CreditPoint Software’s solution allows for better management of important customer relationships to create a higher customer satisfaction rate.
Conclusion
Automation and technological advancement have revolutionized the credit and collection processes we are previously accustomed to. That said, increased efficiency and decreased DSO are a priority for many companies looking to implement an improved credit and collections management software.
Schedule a consultation with CreditPoint Software to learn more.