The succes of credit management

Discover what credit management could do for your organization

Credit management

A proper cashflow is indispensable for the continuity of your company. Credit management has an important part to play in the financial continuity, and is an integral part of the entrepreneurship.

Many companies do not outsource their credit management and debtor management. The employees of the company spend valuable time on keeping track of the debtor management. In most cases, no problems occur. However, when a debtor does not pay, for whatever kind of reason, this might become problematic. Risks have not been reported early enough, which means the company can not anticipate on this. After several, the company will transfer to the debt collection. A chance has been missed and unfortunately, time and money have been wasted. The invested time and money could have been put to use differently. 

What is credit management?

Credit management is a discipline finding its origin in the United States. Due to successes in corporate life, the discipline is gaining popularity in the Netherlands. The credit management process is often seen as debtor management. The discipline of credit management is about more than just debtor management. Three important aspects are part of the discipline of credit management; debtor management, credit information, and debt collection. Thus, credit management is more than just debtor management, it is an integral interplay of all these aspects. If the credit management is practiced properly, credit risks will be discovered in an early stage, the debtor balance will be decreased an outstanding invoices will usually be paid faster. This results in an optimal cashflow. Because of this optimal cashflow (financial flow) the liquidity position can be enhanced and competitive advantage can be increased. 

Outsourcing credit management

By outsourcing credit management, you can profit from the knowledge and expertise your organization can trust on. The specialists of the discipline credit management are experts on the field of recognizing risks and managing the debtors. The credit managers can work efficiently and transparently. Unnecessary personnel- and collection costs can be prevented. A credit manager is able to work more forcefully than your employee who is also responsible for the everyday client contact with your debtors.

The success of credit management

The success of debtor management is dependent of good communication in which clear agreements are made and the strategy is elaborated on in a transparent matter. Moreover, the integral collaboration with the department of sales is of big importance, in which decreasing the debtor balance is the goal. Many organizations look at the debtor balance as a fact, as a part of entrepreneurship. With the professional shaping of the credit management, the debtor balance can be decreased with over 10%. By decreasing the debtor balance, money will be made available that can be used to invest. The consequence of this is that the debtor balance does not remain a fact; the outstanding balance will become an opportunity. 
By the professionally shaping of the credit management, you will decrease the debtor balance, you will optimize the cashflow, you will look more professional and customer relationships with debtors will improve because of the clear communication.

Would you like to know more about what the credit management process could do for your company? We would like to elaborate further on this in a free personal consultation without obligations. Contact us through the contact forms and you will hear from us within 2 working days.