Blog Risk & Credit

Credit management: why businesses should place their trust in an automated company monitoring solution

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Most Dun & Bradstreet customers still use a web-based solution for company monitoring. But a high degree of automation ensures more efficient processes in credit management, too. Matthias Nida, Director Products & Services at Dun & Bradstreet, explains which companies would benefit from automation and what advantages this would bring.

At many companies, credit managers access reports on the credit ratings of customers and suppliers manually from D&B Finance Analytics. The credit manager logs into the web portal, enters the name of the customer in the search window and obtains a detailed overview with the most important KPIs. They then manually transfer this information to their ERP.

“The classic users of our web-based company monitoring solution are smaller companies or SMEs that do not work in a fully integrated manner. They often lack the IT resources to connect their ERP or CRM directly to our database in order to transfer information automatically from system to system. In addition, since only a small to medium number of companies is monitored in the customer’s portfolio, the costs for integration would often not be worth it in the long term. It is always important to consider carefully at which point integration would pay off in the form of process optimisation and efficiency,” comments Matthias Nida, Director Products & Services at Dun & Bradstreet.

More time for strategic matters

It is clear that integration provides long-term benefits when it comes to monitoring companies. After all, transferring results manually becomes a thing of the past: the data is transferred to the ERP system automatically in a matter of seconds by means of an application programmic interface. The data can then be used to make automated decisions, such as approving or rejecting applications, using an integrated credit policy and associated workflows. This procedure saves time and money and results in consistent credit decisions.

Let’s assume that a credit manager needs up to 10 minutes to call up a report in D&B Finance Analytics, read it and transfer the information to the ERP system manually. Automated transmission would remove the need for these steps. As a result, the credit manager saves time that can instead be used for strategic tasks, such as processing cases with high revenue potential but also an uncertain level of risk.

“Automated company monitoring is especially interesting for companies that monitor a large number of customers and suppliers. In these cases, the initial investment for integration pays off in the long run,” explains Nida.

Measures are implemented automatically

Another advantage of an automated solution is that credit policies can be stored in the system, allowing credit decisions to be made automatically. For example, the decision as to which measure is to be implemented as of which payment index is determined within the ERP system. The payment index measures the default in payment, i.e. the receipt of payment after the payment deadline. A payment deadline of 30 is slow, while one of 90 days is delayed. For example, if a customer’s payment index deteriorates from 80 to 30, goods will only be supplied to this business partner against cash in advance. This measure is implemented automatically through the direct connection to the ERP system and the stored credit policy.

“Combining automated processes with human intelligence is an opportunity to optimise workflows in credit management and minimise risks. Ultimately, it is all about using both resources skilfully,” says Nida.

 

Infographik: Automation for finance teams
 

Learn why now is the time for finance to automate credit management processes in this infographic. With survey results from the finance industry and insights on how automation can help you achieve your growth goals.