Modern Credit Management

+ Full Text

A R I M I L I A P U B L I C AT I O N

A Fresh Approach Guide to Modern Credit Management How Technology Advances Credit Management and Empowers Credit Teams

Managing Risk

Payment performance, Alerts from CRA,

In many organizations the management of

internal Customer Attractiveness scores.

risk is done independently of managing collections. In the past this has been because of the lack of technology or systems available to successfully integrate

With the greater use of APIs in business, with transporting of credit reference data, alerts and standard risk information, the first challenge now is where to ‘land’ all

the two.

this data?

Many teams either struggle to obtain

The second challenge is to turn this vast

information or have so much information, usually stored in spreadsheets, that it is a difficult task for someone to make it easily

amount of data into intelligence. Credit professionals need intelligence to make a call on how much credit they are prepared

accessible and usable.

to give a customer, or how they are

This means that many organizations have

invoices for services or goods provided.

pockets of knowledge and expertise in their credit departments that has not always been maximized to its fullest extent. Therefore, it is difficult to gain

going to use to collect monies from sales

The utopia for credit professionals is to use risk information to influence collections behavior and to decide how

insight from this information and more

much credit I grant.

importantly, inform how the debt and risk

In the past the solution has been

of exposure is managed.

segmentation, however this is a time-

Data Overload

consuming exercise for most and only

For the last few years, companies have never had so much data and Credit Professionals are no exception.

brings a snapshot at one point in time that does not move with new information on a customer or new insight in to customer behavior.

Data that a credit professional would want to consider and evaluate at any point of time can include; Credit Insurance,

© 2019 Rimilia

rimilia.com

2

The Solution: One View In addition to being able to take all the information mentioned above, our Collect

repetitive and unrewarding to humans and which is subject to error. As we use RPA, this allows both efficiency and effectiveness improvements to be made.

Credit Management Solution also

We can deploy the staff that were once

provides intelligence to the credit

doing repetitive tasks onto value-added

professional around customer behaviors

processes such as calling customers for

and how they are paying.

overdue monies.

The key is that data can be scrutinized

An important point is that this process is

from a different perspective including

an enabler for the rest of the credit/order

monitoring of trends with any important

to cash team as it allows:

changes highlighted.

•U  p to date ‘ledgers’ to work from in real

All of this is done in real time, allowing

time as application is done in minutes

credit professionals time for analysis and

not days

reflection in managing each customer. Who would not want to do this?

•A  ccurate reporting •A  s the requirement for remittances

Cash Application The prompt and accurate application of cash is essential for every Credit Management department and is one key area in which Robotic Process Automation (RPA) can be deployed easily and successfully across all sectors, using any ERP or accounting system and with any currency.

is reduced significantly less human ‘handling’ is needed •C  laims paid disputes reduced to a minimum Replace The Norm? Having experienced cash process automation myself, I know absolutely that I would swap, in a heartbeat, the scenario of having 16 people do cash (with additional support, at month end,

This process provides a huge opportunity

and with the likelihood of closing the sales

to allow the ‘robots’ to do the low

ledger late) with the one that saw me

value-added process that is traditionally

© 2019 Rimilia

rimilia.com

3

processing 30% more volume, with only 3

demand, an increasing amount of time,

FTE, and where “month end became just

mainly management, is spent wrestling

another day”.

complicated spreadsheets to analyze the

In many organizations, the accepted ‘norm’ is a great deal of unapplied cash with a process that relies on many human factored ‘workarounds’ to make the

forecast of cash received. We then spend a lot of time forecasting that would be much better spent collecting the cash in the forecast!

process work. This is an area of untapped

At month end, days are wasted for cash

potential that impacts the direct cash

to be applied, month ends produced

application team and the wider credit

and setting new forecast targets. During

management team.

the month how much of the time do you

Intelligent cash application automation using Rimilia Cash brings a significant improvement in cash collections with

feel you are chasing the same people for updates and the same clients for payments month on month?

more money in the bank and reduction in

There must be an alternative!

Days Receivable or Debtor Days (DSO).

Cash flow forecasting can take many

Cash Flow Reporting For many credit managers, a significant area of pressure comes from the business to accurately predict the cash flow forecast for the business and how much money is expecting to be collected each month.

forms, Excel, Access, the notepad on your desk, flipchart or the whiteboard in the office. What if, on working day one, each team member could clearly see their cash flow target and the value of open items? What if you could already report on those customers with existing direct debits,

In recent years being able to forecast

standing orders, remittances, or promises

cash flow from receivables has become

to pay already secured? What if you could

an ever-increasing requirement for Credit

accurately report on customers based

Managers and wider finance. To meet this

on their existing payment history? What

© 2019 Rimilia

rimilia.com

4

if you could see all the promise to pays

• Focus on doing the right thing at the

created by credit managers and which

right time. Alloc8 highlights the overdue

have been met?

accounts and provides the collector with

Using Artificial Intelligence driven solutions such as Rimilia Collect, all the above is possible. The Solution for Reporting Rimilia Collect allows you to concentrate

a clear action plan for each account or invoice. Spend time understanding the gap to your forecast and managing the team members whose forecast is less robust than their peers.

on the customers where a specific targeted strategy is required by using the

There is an adage: ‘What gets measured,

intelligence in your sales ledger. Rimilia

gets managed.’

Collect tracks events key to ensuring you achieve your forecast and target each month. • Track the promise to pays that your credit managers log on the system each day. • F lag any failures as Rimilia Collect creates a specific action for the credit manager to take and provides management information on the results of such actions. •P  rovides a view of the month/period

Management Information: More Than Reporting As we have more information at our fingertips likewise we seem to produce more and more reports. Two of the key attributes, of a good leader or manager, is that they act on facts and focus on the process and not the person. To do both you need to have accurate information to manage both the people and processes. You need to measure today the key activities that are going

ahead in one snapshot and can be

to impact on the ongoing future

broken down by credit management

performance.

and updated in real time, with the ability to reference external data.

© 2019 Rimilia

rimilia.com

5

Too much reporting is about what has

process both in terms of efficiency

already happened, for example debtor

and effectiveness and we can improve

days and aged debt, because in fact

significantly in cash application and credit

they are our KPIs. What we also need to

vetting.

measure are the factors we can influence and impact on a daily basis to improve our future KPIs .

Intelligent reporting is an area that new AI technology, with the guidance of some old principles, can bring great value to

The Old Way

the credit professional which allows for

Data is compiled into reports to enable

better decision making and significantly

management to make decisions to

improved team performance.

optimize performance. However, I am sure reports get read? What do we do with the

Managing People & Productivity

reports? How much management time is

The key resource for any business are the

spent preparing the reports?

people we employ to achieve the results

we have all asked the following: Do all the

The Future Is Now Rimilia Collect contains a suite of reports and complementary dashboards that enables credit professionals to act on facts in real time to show the future, for

we want. One common challenge for almost every manager of a business and or department is managing their time and, at the same time, motivating our people to continually achieve better results.

example cash flow reporting and payment

Rimilia Collect’s easy to use dynamic

forecasting. You can highlight areas of

diary system gives full visibility of work to

concern that need action for example by

be performed and an overview of what

having one view in one place of all the

needs to be done. This alone allows a

customer information and attributes.

team leader or manager the visibility to

By using technology to perform the repetitive work we can measure the

© 2019 Rimilia

rimilia.com

distribute and allocate work quickly and in a fair manner.

6

•C  redit managers’ workload can be

the customer payment behaviors from

updated based on either intelligence or

Rimilia Collect’s artificial intelligence

events

system, which can forecast when customer

•C  lear visibility and reporting of what actions are being taken •W  orks alongside strategies that have been created and produces initial workflow for credit managers. •W  orks alongside a forecasting engine based on customer payment behavior. •A  ny customer failure. i.e. a promise

pays, you can add a lot of capacity back into a Credit Manager’s working day. Spreadsheets (and their time-consuming maintenance and updating) can also be removed and all activities for the entire team kept in the Rimilia Collect solution so they can be seen by all, at a glance, and in real-time. One of the challenges in managing a

to pay not fulfilled is flagged in the

credit department is to be fair and to be

appropriate credit managers diary

seen as fair when distributing work across

system including escalation to senior.

a team. Collect solves this challenge by

•M  anagers can view any bottlenecks and plan accordingly The Right Decisions At The Right Time

giving managers the information they need to do their job. Staff cannot manage themselves and see how their performance contributes to the

Studies have shown that 25% of credit

team if they don’t have the right tools to

managers time is spent working out what

allow them to do that.

to do and a further 10% or more is spent checking that a customer has done what

Staff can use Rimilia Collect to see

was promised.

what actions need to be actioned and performed to improve performance. They

The dynamic diary system alongside the

can also use the inbuilt intelligence to try

deployment of strategies allows focus on

something different and even if it doesn’t

the tasks in hand, greatly reducing wasted

work first time it still provides insight on

time. If we add to this the intelligence of

future actions and strategies.

© 2019 Rimilia

rimilia.com

7

In this way, Rimilia Collect enables

•W  orks alongside strategies that have

constant improvement by utilizing

been created and produces initial work-

Artificial Intelligence, allowing credit

flow for credit managers.

managers to review information to make the right decisions at the right time.

Managing People & Productivity The key resource for any business are the people we employ to achieve the results we want. One common challenge for

•W  orks alongside a forecasting engine based on customer payment behavior. •A  ny customer failure. i.e. a promise to pay not fulfilled is flagged in the appropriate credit managers diary system including escalation to senior. •M  anagers can view any bottlenecks and

almost every manager of a business and

plan accordingly The Right Decisions At

or department is managing their time and,

The Right Time Studies have shown that

at the same time, motivating our people

25% of credit managers time is spent

to continually achieve better results.

working out what to do and a further

Rimilia Collect’s easy to use dynamic diary system gives full visibility of work to

10% or more is spent checking that a customer has done what was promised.

be performed and an overview of what

The dynamic diary system alongside the

needs to be done. This alone allows a

deployment of strategies allows focus on

team leader or manager the visibility to

the tasks in hand, greatly reducing wasted

distribute and allocate work quickly and in

time. If we add to this the intelligence of

a fair manner.

the customer payment behaviors from

•C  redit managers’ workload can be updated based on either intelligence or events

Rimilia Collect’s artificial intelligence system, which can forecast when customer pays, you can add a lot of capacity back into a Credit Manager’s working day.

•C  lear visibility and reporting of what actions are being taken

© 2019 Rimilia

rimilia.com

8

Spreadsheets (and their time-consuming

Staff can use Rimilia Collect to see

maintenance and updating) can also be

what actions need to be actioned and

removed and all activities for the entire

performed to improve performance. They

team kept in the Rimilia Collect solution

can also use the inbuilt intelligence to try

so they can be seen by all, at a glance,

something different and even if it doesn’t

and in real-time.

work first time it still provides insight on

One of the challenges in managing a

future actions and strategies.

credit department is to be fair and to be

In this way, Rimilia Collect enables

seen as fair when distributing work across

constant improvement by utilizing

a team. Collect solves this challenge by

Artificial Intelligence, allowing credit

giving managers the information they

managers to review information to make

need to do their job.

the right decisions at the right time.

Staff cannot manage themselves and see how their performance contributes to the team if they don’t have the right tools to allow them to do that.

© 2019 Rimilia

rimilia.com

9

Summary One of the challenges I faced all those years ago in trying to solve the jigsaw puzzles without pictures was that I didn’t have the right knowledge of how to put all the different pieces together. Nowadays we have robotic process automation that removes repetition and human error, machine learning algorithms that learn behaviors and increase efficiency, and artificial intelligence that can provide unique insight from big data. Without these tools, Credit Professionals can’t optimize their own teams and realize benefits to their business. This is why Rimilia customers achieve world class key metrics . Managing credit is like the challenge of the Jigsaw puzzle without the box as we have many ‘pieces’ to fit and work together to get to the set of results we want. Without the proper tools, we can’t complete the picture. Rimilia Collect enables credit professionals to solve the challenge in a new dynamic and intelligent way using Artificial Intelligence and intelligent data analytics. Rimilia Collect is just one part of our AI-driven compete receivables platform which includes cash application, collections, and bank reconciliation that utilizes robotic process automation, machine learning and predictive analytics at its core.

Contact us so we can show you our solutions and demonstrate how working together will improve:

Efficiency • Effectiveness • Experience The future is bright for credit professionals that are willing to embrace new tools and new technologies.

© 2019 Rimilia

rimilia.com

10

Further Reading Visit www.rimilia.com for more information and to access the following resources: ‘The Digital Transformation of Credit’ Will robots change the future of credit management?

‘The Finance Professionals Guide to AI & RPA’ Why machine learning and predictive analytics are key to true AI finance transformation.

‘How AI Makes a Difference to Cash Flow & Collections’ A Webinar exploring real-life examples of AI transforming collections and eliminating lockbox costs.

© 2019 Rimilia

rimilia.com

11

1-833-425-5628 inquiries@rimilia.com • www.rimilia.com

follow us:

© 2019 Rimilia

rimilia.com

12