Better credit management – Four challenges and their solutions

The Covid-19 pandemic has increased the demand for proactive credit management. To prevent the risk of increasing DSOs and payment defaults, there’s a need for quicker action, detailed data analysis, and an optimal combination of digital tools and human judgement. We’ve identified the four most pressing credit management challenges we’re facing today, and we are going to show you how you can deal with them.

Credit management challenge 1: Existing risk and credit assessments no longer provide guidance

The number of non-performing loans (NPL) fell sharply in 2020, as did the number of bankruptcies. However, 2020 wasn’t business as usual. The European Commission has calculated that without government support the number of companies with liquidity problems would have risen to 23% by the end of 2020. This undoubtedly includes many companies that had good credit scores before the coronavirus crisis hit. This means that their creditworthiness after the support measures end is uncertain. In other words, historical scorecards no longer offer reliable guidance.

The solution:

Approach your customers proactively. It’s important to enter into a dialogue with your debtors and to create a relationship based on trust, one that encourages them to communicate openly about their current liquidity position. In addition, use flexible software that you can tailor to the needs of your company and that provides you with timely notifications. I recommend incorporating automatic reminder flows. Also, integrate your software with creditworthiness information providers and your own successful methodologies.

Credit management challenge 2: The coronavirus has impacted every company differently. Customer segmentation is no longer obvious.

The coronavirus crisis brought about a change in every company. Some sectors experienced an unexpected uplift in sales, while others are still working hard to recover. But even within every industry, there were winners and losers. Just compare highly digitised and disruptive companies with classic offline stores that recorded barely any sales during the lockdown.

The solution:

A granular analysis is required. Check whether your current segmentation still corresponds to reality and adjust it where necessary. Create a customised and user-friendly customer journey around payment and credit management within both the B2B and B2C context.

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Credit management challenge 3: Non-payments put pressure on the cash position

Payment terms that are too long often cause cash flow problems. This is especially the case for high-growth companies that focus on scaling up and investing.

The solution:

Factoring – or prefinancing invoices – offers the ideal answer in this situation. You achieve higher liquidity more quickly and you no longer must worry about credit management.


Credit management challenge 4: Today’s invoicing processes require more time, effort, and resources than before

The management and follow-up of the invoicing process require more from an organisation due to the changed debtor landscape.

The solution:

A platform that streamlines the entire invoicing process gives your employees more time to focus on their core tasks. Ideally, this goes hand in hand with an individualised customer approach.

Aptic’s invoice-to-cash solution makes it possible to coordinate your processes down to the smallest detail. It combines efficiency with flexibility and a personalised and consistent customer experience.


Curious to read even more insights into new developments in credit management? Download our white paper on credit extension and credit management below.
 Finally, feel free to contact us if you have any other questions regarding topics such as factoring systems, leasing systems, time to market, open banking, invoicing systems, software solutions for financial services, etc.


Contact me to learn about Aptic’s innovative solutions for credit processing, factoring, e-commerce and retail payments, invoice to cash and leasing!