Most corporate finance leaders don’t see receivables data often enough or understand the significance of it. When they do, it is usually stale and non-specific to proactively analyze trends and manage any problem accounts.
A study by IP consultancy The Hackett Group noted that world-class organizations are tackling this issue. They are employing sophisticated and automated credit modeling tools to deliver faster credit qualification than is possible with manual application methods. These organizations are also integrating credit scoring with dynamic credit limits and predictive analytics on customer and trade partner risk so they have a full 360-view of their portfolio.
The following are elements of real-time, predictive data that world-class organizations consider essential to manage credit risk and reduce their borrowing needs:
- Tiered credit limits based on the financial size and quality of the customer or trade partner
- Automated recalculation and modification of credit based on customer’s buying and payment patterns
- Ongoing risk reporting and recommendations for increasing or reducing credit limits
In our new whitepaper, find out how you can reduce your borrowing needs and costs while increasing your cash flow through improved credit analysis and proactive credit management.