Leveraging Technology for Accounts Receivable Collections

Manual collection processes, including the many companies that still use spreadsheets to aid the process have performance problems, including very low productivity, errors, and poor cash collections.

Perhaps the best investment you can make is licensing an advanced SaaS system which will give you the structure to implement real discipline in your collection operations. It will improve cash flow, reduce bad debts, eliminate manual work, and slash overhead. An example of this would be Carixa™.

If you think your accounting system offers the necessary features to boost your cash collection results, you had better look more closely. If you believe, as our B2B collection agency does, that collections are a “production” function, it needs a production engine.

Features of an Effective Collection Software

A great SaaS collection system incorporates best practice policies, business rules, scripts, contacts, escalations, automated letter campaigns, and workflows into the collection process.

Just as you should not do business without a CRM system to manage customer relationships and sales follow-ups, in today’s business environment you simply cannot get by without a collection management system to manage your cash flow.

By implementing automated workflows, companies can unlock cash, reduce bad debts, and improve customer service with greater visibility. A good system can also prioritize collections for more targeted collections.

By implementing a collaborative accounts receivable workflow system such as Carixa any customer facing staff can initiate a solution for payment, deduction, dispute, or credit-related problems rather than delaying action with callbacks and emails.

Using a system for timely identification and validation of disputes and deductions, the process must include timetables, routing of collection problems and deductions, and management escalation for serious issues. Tracking of collections and deductions with a robust deduction system will provide valuable insight on gaps in compliance or service levels versus customer expectations — particularly useful in identifying systemic, recurring problems.

Use a collection system that can adapt to your policies and use credit and payment scoring models to trigger workflow actions; for example, which customer segments should be a priority, and at what point should you commence collection action? The scores should reflect credit risk, industry payment data, as well as your own experience with a customer.

What You Can Accomplish

With the right system, you can initiate all actions automatically based on a customized workflow

timeline that details specific action steps for the identification of delinquent accounts based on

customer credit rating/payment histories or customer risk class. This allows you to manage the company’s accounts receivable investment more efficiently. You should look for a system

that:

Can handle all categories of transactions online, without resorting to offline manual activities or patches. If you need Excel downloads, it’s the wrong system.
Incorporates your business policies and best practice rules for standardized process.
Offers a collaborative resolution platform for employees, partners, and customers.
Offers customized workflow, so every transaction is handled by the right person at the right time.
Incorporates both credit and payment scoring, so your staff works the priorities.
Drives credit and collection department “production” so that your investment in people delivers the results you need.
Has detailed audit and reconciliation tools built right in, vs. using Excel offline.
Provides a 100% cash application hit on the most complex receivables, while automatically initiating deduction and dispute transactions.
Has features that provide automatic access to customer data and documentation over the web.
Can seamlessly work with outside agencies and services.
Empowers management with a reporting window into performance and daily operations down to the customer level.
Is Software as a Service (SaaS) so it can be implemented quickly, with no hardware or software to purchase.

Outsourcing Your Collections

At Leib Solutions, we provide B2B collection services for companies whose collections are too much to handle for an in-house team. We’re a top-rated collection company trusted by businesses around the world.

Ready to generate more working capital for your business? Contact us today for a free consultation.

January 21, 2019 News Post a Comment

A Guide to Efficient and Effective Collection Practices

The basis of our accounts receivable management services is the prioritization of collection activities around the money and the priorities instead of an “alphabetic order” type of collection effort.

1. Create a Plan of Action using situational strategies based on the accounts and circumstances, but remember that measuring collection metrics is not the same as following the strategy.

Collection Strategy and Corporate Goals. Even if you do not have a modern collaborative collection system, you can still incorporate many elements into your manual process.

Manual collection processes and spreadsheet collection management are very inefficient and ineffective, very low productivity, and error-prone.
Your process should require you to think about and choose collection “strategies” (vs. the usual A-Z collection approach) which will create an environment where performance matches the corporate objectives for cash flow.
Your process should incorporate an easy-to-modify “rules-based” action driver that takes into consideration your corporate objectives and policies and manages collector activity and priorities. It also will adjust collector actions based on changes in customer risk.
It should support simple-to-assign alternative collection strategies, or a combination of strategies, depending on the collection staff expertise and customer risk categories.
1. “Risk Scores” strategy, attending to the riskiest customers first to avoid bad debts.
2. “Payment Scores” strategy, using your historical payment information to re-train customers payment habits.
3. “Payment Gap” strategy, which benchmarks your customer aging against your industry to (ask Smyyth for more information on this).
4. “Cash Goal” strategy to focus on maximum cash goal for a month or quarter, which could mean focusing on the largest dollars regardless of age.
5. “Delinquency Reduction” strategy, which focuses on reducing the number of accounts past due aging buckets.

Workflow. System rules should establish workflow, as well as escalation to management, which will change according to the circumstances, age, number of collection calls, etc. A collection strategy can include (automatic) collection call reminders, system collection emails, letters,etc., all determined based on what the result of the last action was and a timetable. For example, if the customer made a promise to pay, the system should generate an email confirming it, and then set up an automated follow-up on the appropriate day.

Standard Documents Library. Not only can all collection documents can be standardized and then customized if needed, but also automatically transmitted. Letter campaigns, for example, can be outsourced to mailing companies, without any manual intervention.

2. Prioritize Collection activities by size and risk, and around the resources and time available to do it, for the biggest return. Whether this is controlled by your collection system (the best way) or by manual ledger review, the priorities would include:

3. Monitor all accounts receivable at least on a weekly basis and follow up on those customers when due, or in the case of very large invoices, a few days ahead of the due date as a friendly reminder to them that it is important to you.

4. Define Responsibilities and roles of the collection department around skills

High volume, quick-hit collectors
Complex account collectors
Final demand – tough collection negotiators
At what point are accounts “escalated” to a higher level
Dispute resolution specialists

5. Schedule your calls by time zone, and try to catch decision makers earlier or later than you would accounts payable department. Note: west coast companies often start at 8AM.

6. Quickly Resolve Disputes .The timely management of invoicing problems and disputes can make a dramatic difference in your ability to collect outstanding balances, as it can affect your customer relationships.

Our Best Practices

While this blog does give you a detailed rundown of what we find to be collections best practices, sometimes you can’t do it on your own. When you’re looking for AR outsourcing that produces results, turn to the experts at Leib Solutions.

January 11, 2019 News Post a Comment

Subrogation Collection Best Practices

Insurance executives are familiar with subrogation, the insurer’s legal right to pursue damages after paying a claim. However, it turns out that many insurers are unable to or neglect to pursue their subrogation rights. If they do, they may not be using best practices in doing so. This results in profit opportunities lost forever, as well as inefficiency and excess overhead expense in the recovery effort. In both ways, it hurts insurers’ profits.

Every dollar of subrogation you capture goes to the bottom line, and every dollar that ages out and gets written off is profit lost forever.

Focus

Subrogation is an integral part of the insurance process – not an afterthought – and should be managed as such. It is worth millions or even tens of millions of dollars in profit opportunity. When a subrogation recovery function is optimized, it can have a material effect on the insurer’s operating ratio.

Perhaps as much as $1 of every $4 paid in claims can be recovered through subrogation. Many, perhaps 1/3 of all potential claims, are never handled at all, representing a unnecessary revenue loss.

This area is a huge opportunity for every insurance company and requires a greater level of focus and management (or expert outsourcing) in order to capture the opportunity.

Processes and Systems

Clear and well thought out processes must be developed so that the subrogation effort is efficient and timely, and produces the desired results. There is too much money involved to ignore this process. This includes well-crafted demand letters. Here are some quick tips:

Documentation

Documentation must be secured and organized for quick analysis of the potential. If there is a lot of money involved, it may be helpful to check to see if the party from whom you are attempting to collect has the funds before you invest too much in the recovery effort.

Systems

You need smart systems to track claims, their status and all collection/resolution activities. A collaborative system is the key, since you should be able to escalate a case internally or for additional input or advice. This system should include automated workflows, follow-up protocols guaranteeing that no claim ever slips through the cracks, and automated claim communications. A plus would be the ability to push a button to assign a claim or category of claims to an outsourcer/agency, and continue to track the results through your system.

State of the art web-based software, such as that used by Leib Solutions, includes all this, plus uses robotic processes that replace repetitive and error-prone manual work with automated error-free and on-time solutions.

Tips

Re-engineer processes from beginning to end
Automate systems eliminating repetitive tasks
Install management oversight dashboards
Have a collaborative system so that resources throughout the company can be accessed according to the circumstances.
Use performance tracking

The system, of course, should track the performance of individual subrogation analysts with concise management reports. You will find that in a staff of ten, the success rate can vary wildly, with some more than twice as effective as others. Smart performance reporting can identify areas of success or weakness; it should be used to initiate a virtual feedback loop and training for staff.

Statute of Limitations

While a majority of states allow subrogation claims for either two or three years, or even longer, after the incident, there are a few that allow only one year so you need to aware of state laws in this regard. Allowing subrogation claims to age out so far – which many insurers do – is a bad practice on all accounts and will reduce the ultimate recovery. If you can’t get to them all promptly, by all means outsource collection to an agency.

First-Party Payments

When making first-party claim payments, you will need to prove that the amount paid was reasonable and well documented. It’s on you to prove the payment was appropriate. Further, you cannot recover Replacement Cost, even if you paid it, only Actual Cash Value.

Advise of Subrogation

Advise the insured as soon as possible that you are going to pursue subrogation to preclude them taking actions which may hurt your case, as well as to elicit their cooperation. Early notice should also be given to your insurance counterpart, along with documentation supporting your case. The faster you start the process, the sooner you will achieve a successful outcome.

“Tort” Vs “Debt”

A subrogation claim is generally considered a “tort” – not a “debt”, so it has been found by the courts as not subject to the FDCPA. This is important as defendants have in the past tried to use assertions of FDCPA violations as a potential hammer against collectors. Note: there are some state laws that go contrary to this. It’s important you have this knowledge so you can protect yourself.

Expansive Rights of Insurer

Remember that you have all the rights of your insured against responsible third parties, even if those rights are contractual rather than founded on tort law.

Lawsuit vs. “Amicable” Resolution

The expense of litigation should give one pause. Sometimes lawsuits (or the threat thereof) are required. However, claims most often remain unresolved because of lack of attention and the inability to give the issue the time and focus needed. That is where an agency comes in.

Conclusion

Subrogation claims come in all sizes and varieties so you have to balance the potential recovery vs the amount it costs to get it. This is called the “netback”; how much do you end up with after labor, agency or attorney costs. If you engage a professional agency, the expense may (or may not) be higher, but the old saw applies: 65% of something is better than 100% of nothing.

However, every insurer has limited expert resources, so the more time you spend on any function (such as subrogation) that is tertiary to the core mission, means less time spent elsewhere. Frequently, we find that when subrogation issues get less attention than they need and require, they age out and become more difficult to resolve as a result.

In addition, complex disputes such as subrogation are hugely expensive to handle; often on average hundreds of dollars per claim. Managing subrogation is a balancing act, and this is where an experienced outside agency can be very helpful.

Fortunately, there are professional organizations such as Leib Solutions that enable you to cost-effectively outsource subrogation claims and accounts receivable management services. What Leib offers include:

Expert staff
Maximum recoveries
Top customer service
Commission based on results vs. overhead expense
State-of-the-Art collaborative collection technology
Client performance dashboards
Legal forwarding (when required)

Please contact us for more information on all of our AR outsourcing services.

December 28, 2018 News Post a Comment

Things to Consider When Hiring a Collection Agency

Every company needs a collection agency, since there will always be customers that default or who will not pay under the normal terms. Hiring the best commercial collection agency is in your best interest, so here are some factors you should take into consideration when choosing an agency for your company:

If you are B2B, you must receive commercial collection services for bad debt, as commercial specialists have experience dealing with corporate debt matters and bankruptcies, and their collection approach is more specialized. A good commercial agency may only assign 300-500 accounts per collector since a more consultative collection approach is needed. A consumer collection agency may assign a couple thousand accounts to each collector and are often use “dial for dollars” call-center operations, using collectors with little experience.
Every collection agency will receive occasional complaints from debtors — it’s just part of the business. But, if you see there are too many, or there are complaints of unethical practices, look elsewhere.
Most business debts fall into the same categories of reasons for non-payment, including:

Cash flow problems
Disputes on pricing or product to be worked out
Confusion on contracts or documentation
Client failure to follow-up frequently enough

However, if your business is not the typical commercial transaction (insurance, deductions, subrogation, online services, etc.), check to see if they have experience in what your line of business.

It’s very easy to get into the collection business so to feel comfortable, you should be focusing on companies that have been in business for 10 or more years.
Agencies in most states must be licensed and/or bonded. In the end, everything comes down to character, so check out the management of the firm. If they are not shown on the website, move on.
A good collection agency will have strong internal controls and operating procedures to ensure high-quality results and customer service. This includes recording all telephone conversations for both staff training as well as compliance with collection regulations.
If your internal staff needs in-house training to motivate and equip your collectors, the agency might have the resources to help, so ask.
Although the Fair Debt Collection Practices Act (FDCPA) relates to consumer collections (not B2B), the agency should have their collectors trained to comply, since there are times when a commercial debt might morph into one with consumer attributes.
If they have association accreditations, it is a good sign. Leib Solutions, for example, is a member of numerous industry associations. We have also been awarded an A.M. Best Expert Service provider badge for seven years running.
If you place only a few accounts, the method of placement and reporting is not an issue for you. If you are a large organization, however, you need a firm with secure electronic placement, communications, and web-based reporting to streamline management.
The age at which accounts are placed for collection is an important predictor of collection success. All too often, companies will hem and haw, hoping something will happen, and let a debt languish because they do not want to pay 1/3 of the amount to collect it, and by the time they contact an agency, the debtor may well be out of business, or beyond hope.
Always focus on the successful “net-back” — the cash you get back — and not what you are going to pay the agency. It’s better to recover most of the bad debt, rather than take a total loss.
The most successful companies use automated placement by established time-parameters to avoid uncertainty and to keep collectors focused on the current accounts. With this method, you decide in advance at what age you will assign accounts to an agency and stick to it. Ninety (90) or 120 days is a good starting point for this. Wait much later, and the collection value declines precipitously.

First party collections: You want to select an agency with both the technology and experience to handle “first-party” collections (using your name, as invoices come due, or special projects) to give you operational flexibility. This requires the ability to quickly and simply exchange information between their systems with yours, to keep both up to date. Leib uses the remarkable Carixa Credit-to-Cash Platform for this. The system is collaborative, giving the client a view and opportunity to participate in solving problems.

November 6, 2018 News Post a Comment

5 Tips to Help Forecast Your Bad Debt Allowance

Estimating your corporate Bad Debt Allowance (BDA) is a fundamental job of the Credit Manager. Doing it right will help your company prepare for the expense and possibly enable you to head off losses. This infographic offers five factors that can help you keep your company’s Bad Debt Allowance within a predicted threshold:

To learn more about Bad Debt Allowances and how to predict them more accurately, check out our previous blogs. If you’re in need of collection services, Leib Solutions has you covered. We offer first and third party collection services as well as a range of other related solutions to help your company get the return on the profit you deserve. Want to learn more? Call us at +1-855-509-6607 (US) / +1 856-439-1179 (Int’l), or fill out a contact form.

July 17, 2018 Accounts Receivable, Collection Management, Credit Management, News, Order-to-Cash Post a Comment

Leveraging Order-to-Cash For Shareholder Value

Improve Order-To-Cash to Increase Shareholder Value

The Order-To-Cash (O2C) process is an area that that remains largely untapped by many businesses. However, smart and effective management of the O2C process could help to improve business performance and the bottom line. It is no surprise that more and more corporations are beginning to prioritize this strategy for future business success.

Order-To-Cash is complex, thanks to the many cross-functional activities involved in the process. Activities include credit analysis and approval, order management, invoice, billing and collection, cash application and deduction and dispute resolution, as well as analysis and reporting. All of these activities will take place across the organization. However, many companies do not integrate and manage all of these activities as a single O2C process. Read More >

August 2, 2017 Accounts Receivable, Collection Management Post a Comment

17 Practices that Improve Cash Flow

Accounts receivable collection at many companies is still done the way it was in the green eyeshade era, leaving a great deal that can be done to improve results. Like many repetitive processes, collections is a “production” operation, and can be “re-engineered” to improve cash flow, reduce DSO and slash the disputes that result from letting unpaid accounts go stale.

Cash flow is the lifeblood of every business and success or failure depends largely on how this most important accounts receivable asset is managed. Collecting receivables more quickly enables companies to reduce bank borrowing, invest more in growth, and improve profits too.. Our experience is that the level of delinquencies can be dramatically reduced, cut in half or even better with some planning and effort. Here are some basic ideas to implement in your organization.

Credit and Collection Policy. Every company needs a credit and collection policy which gives the department the appropriate framework in which to work. This policy should be developed by management – detailing the criteria and the tools which will be used (restricting credit, collection agencies, lawyers, etc.). Establish standard policies and practices in your organization for yourself to handle. If you are a small company, even a one page credit and collection policy may be enough. Larger companies need to go into much more detail.
Advise the Customer of Your Policies. The customer should receive a written explanation of your credit and collection policies; that is, how you expect them to behave. Ideally, make it part of your Credit Application, but always email it afterward so they understand the rules of the game.
Credit Application. Use an automated credit application system which incorporates your policies and other agreements, utilizing e-signatures so you have an official signed agreement. This will save you countless hours that you can spend collecting.
E-signatures. If you need documents signed, check out the many electronic signature applications, and forget faxes. We use a service called DocuSign, but there are a number of such companies. It is extremely easy to use, and e-signatures are legally binding. This accelerates and simplifies getting any agreements signed.
Zero-Sum Result. Many companies wait until the customer is seriously past due before making the first Collection contact. This is a zero-sum game: if you do not collect what you are owed, the customer can use your money for free working capital, or more likely they pay another vendor who was more aggressive in their collection follow-up. Your customers will learn from your practices.
Good Customers Need Attention Toohem to, if they know you are on top of it. Many large companies use software to optimize their A/P Payments – they track how well you follow-up, and pay you accordingly. Small companies follow the same practice without the software – they pay you based on how you train them to pay you.
Letter templates and Call Scripts. How much do you want your staff to exercise their inner artiste? It depends on the experience of the individual, of course, but generally the answer is “little to zero”. Do not leave it up to staffers to come up with their individual communications standards. This includes collection letters, voice mail messages, and collection scripts. Standard templates meeting best practices should be developed, and used by all. Our advice is to skip written snail mail letters, except when you need to give official notice, certified mail, etc. Do not leave it up to individuals to make up their own policies and rules about how frequently the customer should be contacted for money and what the proper contact protocols should be. Most people do not like to ask for money; consequently, left to their own devices, they may not call with the consistency required to have effective collection function.
Systems and Workflow. If you have sizable receivables outstanding or many customers, or if you still use spreadsheets, you must acquire a workflow system to manage collections and automate the routine tasks. See Carixa for an idea of what a comprehensive, integrated “Software as a Service (SaaS)” system can do for you. You are virtually guaranteed faster collections, lower DSO, fewer delinquencies – as well as reduced overhead- if you deploy this powerful collection software. As with all SaaS offerings, it is internet browser based, so there is no software to install or hardware to purchase.
Contact Data. Your customer contact data should always include the email addresses of your payables contact, controller, and management. If the customer is a small company, you should also have the owner’s cell phone number. All of this information can be picked up on your credit application for new customers. Otherwise, it is a project.
Email vs letters? There is no contest – email is immediate, and less work, but just as with form letters, you need to use pre-formatted collection emails.
Make Paying Easy. Offer multiple ways to pay, including ACH and credit card with your smaller customers. Intuit QuickBooks, for example, has a very effective and free ACH offering for e-billing and a payment module that integrates with QuickBooks.
Train Your Staff. A bit of training and role playing can improve results dramatically. Get outside help if needed.
Collection Activity Cycle. Don’t wait as long as your competitors to make the first collection contact, and use email to your advantage. Get the money first.a. Early Intervention. If a large invoice will be coming due, it’s worthwhile to call in advance of the due date to solve any problems delaying payment. And, don’t be shy about sending “friendly reminders” at even 5 days.
b. If you did not receive a response to a call or email, follow-up every two-three days until you get a response.
c. If your customer is a smaller company, escalate a more serious collection matter by emailing or calling the customer management or business owner.
d. If a collection problem gets more serious (regardless of the size of your company) call your counterpart CEO to CEO, or CFO to CFO.
e. Track customer promises. Do not let them off the hook with unfulfilled promises. If the funds were not received the day they agreed to pay, call.
f. Expedite all communications. When sending invoice copies or other documents, scan and email them. Email eliminates the usual snail mail excuses, and you are assured that it’s reaching the intended party.
g. Use credit holds when an account is delinquent without a firm promise to pay.
h. If you are getting nowhere, assign the account to a collection agency, and refocus on those you can make progress with.
Prioritize Your Work. If you do not have all the experienced staff you need, or systems that will do it for you, prioritize your collection activity so you are working on the receivables which offer the greatest cash flow payback. If you have an advanced system, you can also employ risk or payment scoring to assign the accounts needing first attention. You may also consider outsourcing all or part of the function to a qualified agency, which usually produces more focused and better results, and usually at less expense than full time staff.
Assign Goals and Track Results by Department and Collector. Collections is a “production” job and you need to develop clear goals on cash and delinquency targets for the month, as well as number of daily calls and contacts (since you need to have all customers touched). Daily reporting should include calls made, promises obtained, disputes resolved, etc. Monthly reporting should roll up the daily results, plus report the financial results – Cash Collected, DSO, Delinquencies, etc. Of course, the department goals must match up against the corporate objectives from your CFO.
FDCPA Regulations. The Fair Debt Collections Practices Act doesn’t apply to B2B transactions, but always keep in mind that you must comply with the FDCPA if you are dealing with consumers. Regardless, all customers should always be handled in a professional and consistent manner which reflects your corporate culture, even the few abusive customers.
Collection Agencies and Outsource Services
Professional receivables organizations such as Leib Solutions offers both First-party and Third-party collection services. First- party is another name for day 1 outsourcing of all receivables under the client’s name. Generally, first-party is performed for a low service fee, often per invoice or a low percentage (even under 1% if your volume is high). Third-party is the traditional “collection agency” service when accounts get old, with fees commensurate with the age and size of collections.Uncollected invoices will eventually be written off as bad debts. It’s better that you assign them to a qualified collection agency while they are still collectible. It’s shocking how many companies wait until there is little hope of collection, telephone numbers disconnected, even bankruptcy, before calling a collection agency. This is evidence of a failed collection policy. The old saw “better to get 70% of something than 100% of nothing” applies here. It’s just common sense.

The first step in improving your company’s cash flow is to ‘take the first step’. Lay out a plan of attack or, if you want some advice, contact us. We will be happy to help in any way we can.

July 11, 2017 Credit Management, News Post a Comment

Automated Credit Applications

Best Practices – Online Credit Applications
Credit Application Software
Credit Application Systems

80% faster credit approvals
90% less manual work
5% more sales from new accounts

Online credit applications are relatively new and even the simplest offer a browser-based application filled out by the customer and then processed by the creditor (but usually completed off-line, manually). This may work for very small companies, but companies with large numbers of customers need an automated solution. A state-of-the-art credit application system from Smyyth’s affiliate Credit2B, has rich, complete features; the easiest way to explain it is:

The customer fills out the online application, e-signs any included agreements, guaranties, forms, etc., and clicks a button to submit.
With 100% automation, Credit2B produces a complete credit file, ready for approval, or using workflow to assign to someone else for action or decision.
The multiple-day process, the manual work, and expense to set-up new customers and approve new orders can be slashed by 80%.

Best-of-breed features are in Credit2B’s End-to-end credit application solution for on-boarding new customers as well as managing existing ones.

“Credit2B ECOS™ delivers an online Credit Application platform that gives us all the information needed for a decision, all in one place. Their solution transformed our multi-day manual process to literally just hours.” Michael Pettyjohn, Director, Customer Financial Services, Danone

Credit2B’s advanced, fully automated credit application system replaces a mishmash of tools and manual tasks including e-mail, faxes, repetitive telephone calls, instant messaging, credit reports, hard copy files, etc. When you include data from Credit2B’s large creditor network, this results in a “virtuous cycle’, where key information nodes including industry data are always kept up-to-date.

We have streamlined credit management processes, information, communication and collaboration in such a way as to accelerate trade credit transactions.

The benefits are straightforward and the ROI is large.

Speed. Accelerate speed of order approvals, reducing the time up to 80%, in many cases from days to just hours. If you save 5 days in new order processing, you are adding a week’s incremental revenues from new customers (2% per year).
Costs.
Eliminate almost all manual work, and the wasteful cycle of follow-up calls, faxes, emails, hard copy forms and letters.
Accuracy.
Get more accurate information direct from the source (the customer), eliminate manual entry errors.
Better Credit Decisions from having complete and timely information.
Customer Relations. Improve customer service with a “frictionless” process with your branding that eliminates the wait for order approvals.
Credit2B ECOS™ has powerful features of interest to all credit managers.
Dashboard for keeping track of applications, reviews, ratings, etc.
Workflow and Calendar guides the process from the point the customer submits the application until you approve it.
Credit Bureau Data are embedded in the application system (i.e., Experian, Equifax, Credit2B).
Trade References are automatic, including customer-supplied references, credit group experience, and Credit2B’s massive trade database.
Bank References are automatic, fast, and complete.
Credit and Payment Scores are integrated, with expected payment days.
Financials. Customer-submitted and public company financials are included automatically.
Automatic Reviews. Based on your rules, the credit file is updated periodically. Workflow, authorization levels, and automated system updates and follow-ups keep your records up-to-date.
Credit Risk Control. Keep files up-to-date, with monitoring and system generated updates. For example, refresh financials annually, or adjust credit lines when payment experience changes.
Online Credit File is maintained for all documents, reports, and credit decision justification with backup.
Compliance, Legal, Signatures. The information you need for legal compliance, including valid digitally signed agreements and documents.
Online Sales Tax Exemption Certificate File to keep you compliant.
Existing Customers? You can include all of your customers for automated monitoring, updates and periodic updates (such as private financials).
Integration with your ERP, and customization for special needs are available.
Summary

In summary, if you plan to develop or license even the most simplistic electronic credit application, it will be an improvement over hard copy manual forms. However, to achieve the full time and cost saving potential of this concept, you will need to consider to an end-to-end application such as Credit2B.

Please contact us to arrange a demonstration.

June 23, 2017 Credit Management, News Post a Comment

11 Trends in Credit Automation

Here are 11 trends you need to know about the future of credit decision automation; many of these are already available in a best-of-class risk management platform. Using Artificial Intelligence (AI), and Robotic Process Automation to replace manual tasks and improve accuracy in B2B credit checking, the best systems can revolutionize the credit approval process for new and existing customers.

Commercial credit scoring algorithms will use “machine learning” technology to integrate real-time data trends and human decisioning (and even get close to how a company makes decisions).
Commercial credit insights will draw from data open source and community data, enabling enterprises to seamlessly bring together real time business information from disparate sources.
Interactions between trade suppliers and their customers will move from static to dynamic through collaborative credit application processing, enhancing speed and accessibility to highly valuable information.
Global trade interchange networks in industries becomes more automated and seamless through a virtual network, speeding and improving the overall process for references on common customers.
Customer risk analytics platforms will enable every user to customize their experience based on unique portfolios they manage.
Organizations will use their own accounts receivable payment information combined with those of other trade suppliers in their industry to set highly effective cash flow forecasts.
Large ERP and traditional bolt-on software partner systems will be challenged by more flexible and secure cloud systems with configurable software and already-integrated credit databases.
Enterprises will seek commercial credit platforms that seamlessly integrate customer information, trade supplier experiences and public filings across borders, adapting to local standards, language and currency differences.
Company departments will engage collaboratively using connected platforms that seamlessly exchange information and manage tasks through effective workflow.
Users will expect their information to follow them and be available seamlessly on mobile apps making remote work easier.
Business process execution will accelerate, compressing the time needed to complete repetitive functions and make decisions. For example, the time required to onboard new customers using an electronic credit application fully integrated with contracts, signatures, references, credit information, and workflow can be slashed from many days to under a day.

This was supplied by the analysts of our credit risk information affiliate, Credit2b.com.

Please contact us if you would like more information on any of these important business trends.

June 12, 2017 News Post a Comment

Best Practices for Credit and Collections

Best Practices to Include in our Credit and Collections processes include

All employees need to understand the mission and objectives of the credit department, so they deliver a consistent message to customers and properly represent the “culture” of your organization. Just as with customer service, the mission of the credit department has to be to make it easy to do business and to enhance – not get in the way of – the company’s success.
Draft a Credit and Collection Policy manual that incorporates the department mission and objectives, credit approval limits, reviews, and responsibilities, as well as laying out the collection policy, including impact on credit lines, dates for assignment to agencies, etc.
Start new customer on-boarding with a fully automated online credit application that captures all the information you need in one step and integrates with your enterprise financial and CRM systems. A best-in-class system will be automated “end-to-end”, eliminating the dozens of manual tasks and hand-offs, emails, faxes, off-line agreements, etc., and can save you over 80% of the labor and slash processing from many days to hours.
Make sure that your processes are flexible and do not get in the way of on-time payment. For example, do you offer options of credit card, ACH and have you considered cash discounts (enforced) for early payment?
Examine the causes of invoice payment delays and disputes, as they often have their root-causes embedded in your own operations.
Make sure that your customers know who to contact with customer service or payment problems. They should have a single point of contact if possible, who has immediate access to the customer records, using an on-line CRM or enterprise system that has all records of business and contacts.
Monitor your accounts and update credit reports regularly, no less than once a year, for changes in their credit risk profile, so you can raise credit lines when appropriate to increase sales, or are not blindsided with a preventable bad debt. Use payment and credit scoring systems to prioritize collection work to the customers most at risk, or those that do not pay on time unless you contact them. Set up collection strategies in your collection system, with pre-set collection steps and workflow so nothing gets overlooked.
Measure your staff performance for DSO and delinquencies monthly. You should prepare cash flow and delinquency targets for all collection personnel, and they should be held accountable.
Separate disputes and deduction resolution and management from invoice collections as they have a different experience, workflow, and resolution characteristics from the straight-forward routine collection work.
Acquire an automated cash application system (“auto-cash”) that applies remittances in real-time. Cash should be applied and reconciled daily so backlogs do not accumulate. Use a system that assures 100% auto cash application.
Evaluate and compare your outside agencies for collection rates, as well as customer complaints. Pay more attention to the net you get back and less to the collection percentage they charge. A more expensive service often delivers the best net return to you.
Get training for your staff in collection techniques and psychology and, if you deal with consumers, the Fair Debt Collection Practices Act (FDCPA) is very important.

This is not meant to be a comprehensive list but a quick summary of common best practices for credit, collection, and accounts receivable management.