Process and Decision Automation in Credit Management

High volumes of credit requests are costly to a company due to the number of employees needed to process paperwork, customer service time spent relaying credit information, and riskier credit portfolios due to out-of-date views on customers’ ability to pay. High volumes of requests can be due to either new customer credit applications coming in or through requests generated from credit holds or order blocks. Delays in the approval of credit for both types of requests can lead to unhappy customers and lost sales.

Most companies respond to increased volume of credit requests through workforce increases or lower standards for credit risk evaluation. The former is costly to the enterprise due to payroll increases and costs associated with the onboarding and training of new employees. The latter is costly to the enterprise in the form of a riskier credit portfolio. The core reason a high volume of credit requests is costly to the enterprise centers on the numerous manual processes included in the credit approval process. These processes are filled with manual, paper-centric tasks that include faxing, filing, organizing, and searching through stacks of paper.

The following diagram segments credit requests between High/Low Value and High/Low Volume for a total of four different segments. A Low Value request poses little risk to the credit portfolio due to the desired credit terms and credit limits. A High Value request poses a greater risk to the credit portfolio due to the amount of credit the customer is requesting. Both value and volume can be subjective based on business or industry factors.

In each of the four segments, the manual processes can be automated and digitized through an electronic system. Documents required for credit requests, such as Trade/Bank references, credit bureau reports, and financial statements, are automatically requested from their specific sources. Information is received and stored electronically for quick and easy access. Follow-ups, notifications, and reminders can be automated using a rule-based workflow.

Low Value credit request decisions are automated based on quantifiable and repetitive everyday credit decision rules applied in the credit department. Automation of these types of requests poses little risk to the organization due to the negligible effect each request has on the overall credit portfolio due to the small size of the request or the strong payment record of the customer. Automation of High Value credit requests presents challenges due to the high amount of risk posed to the portfolio by the customer in question. In these situations, it is best to adopt a risk segmented approach that utilizes both an automated and manual approval strategy. Based on risk classification of the request a decision is either automated or sent to a credit manager for manual approval.

Looking at the chart, the need for automation, of both process and decision, is most greatly felt in the Low Value/High Volume segment. The high volume creates significant back office costs that can be eliminated through automation. The low risk posed by a Low Value credit decision allows for the easy automation of the actual decision, based on predefined criteria.

The Bectran Instant Decision Manager(IDM) accomplishes the automation of both process and decision. Users segment their customer base by risk and apply appropriate credit assessment and data requirement rules for automatic approval for new customer credit applications and credit limit increase requests from existing customers. Credit requests that meet the specified criteria are automatically approved or declined based on the IDM process rules. Utilizing preset, user-defined criteria IDM automatically collects data from the required sources, scores the data based on a custom scoring model, and then produces a credit decision instantly. IDM greatly benefits credit departments subjected to high costs generated from Low Value/High Volume credit requests. IDM reduces paper usage, makes customers happy due to instant credit decisions, and frees employees to work on higher value tasks.

Credit Research Foundation Hosts Annual Expo in Bectran’s Hometown

Bectran Showcases New Features During Credit Research Foundation (CRF) Expo

ITASCA, IL–(Marketwired – August 18, 2016) – Every year credit practitioners gather together to network, learn, and share their knowledge at the Credit Research Foundation Forum and Expo. In downtown Chicago, from August 8th-10th, Bectran had the opportunity to actively participate with sixty other vendors and three hundred members of the credit community.

Upon surveying key participants across different levels at the conference, there was a notable increase in demand for credit management automation solutions. This indicates that companies are increasingly willing to make the needed investment in technology to boost the productivity of their employees and retool their credit process.

During the Open Forum, over 75% of inquiries submitted by participants at the conference cantered on ways and tools to automate their current manual credit management process, while also streamlining data exchange across interdependent software systems. As the industry leader in credit management automation and credit process optimization, companies across a broad spectrum: wholesalers, distributors, manufacturers, service providers, etc.; sought advice from the Bectran team on how to repower their credit process and reposition their credit department for high performance. The conference also provided the opportunity to showcase some of the latest technologies in Bectran’s suite that facilitates seamless integration and data exchanges between the Bectran platform and ERPs including other interdependent software platforms.

Overall, this year’s CRF conference was a very exciting and rewarding experience for Bectran and the company looks forward to furthering the partnership with the Credit Research Foundation.

ABOUT BECTRAN

Bectran, the industry leading SaaS platform, has grown rapidly over the last five years to become the companion toolkit for the Credit Department just as CRM is for the Sales Department. From simple to complex organizations, SMEs to Fortune 500 companies, Bectran has helped companies cut down the time to process and approve credit by over 90% whilst significantly lowering the risk of credit defaults and the cost of collections. Our customers enjoy the ease, speed, and cost-effectiveness of adopting the Bectran platform. New clients are on-boarded in matter of days/weeks. Credit Professionals in various industries have described the Bectran platform as the future of the credit department. Recently, Bectran was recognized as a top innovator in the credit software industry.

The Real Cost of Processing Credit Applications Manually

Processing paper-based credit applications manually is a painful, unenticing and tedious process. Not only is this process inefficient, it also leads to low levels of job satisfaction due to its monotonous nature with a high potential for poor quality service delivery to customers. The manual approach to credit processing is fast becoming antiquated because of the increased need for companies to remain competitive in the ever evolving digital age.

Here are some of the basic costs associated with the manual process:

 

  • Information Storage and Access costs

In the manual process, the medium of information storage is primarily paper. Credit Applications, bank and trade references, financial statements, tax exempt certificates, personal guarantees, credit bureau reports, etc. are all examples of paper based documents in a manual process. As the volume of paper-based information grows, the cost of organizing, storing and accessing the paper-based information in filing cabinets grows. This processing scenario often creates delays in reaching a credit decision on an application with attendant consequences on delayed product shipments and potential customer dissatisfaction.

  • Information Exchange

Processing of credit applications often requires the exchange of information between the seller/creditor and multiple parties, including the customer, references, credit bureau companies, guarantors, internal sales/customer service, etc. In a manual process, such information exchange is done by faxes, emails and sometimes physical transport of information with zero capability for tracking and accounting for the information exchange progress.

  • Information Security costs

In a manual credit application processing scenario, sensitive credit and personal information is stored in unsecured paper filing cabinets. Such information is prone to easy access by unauthorized persons and exposed to destructive tempering without the possibility of physical backups. In these days of identity theft, it’s scary to have customers’ social security and credit card information stored in unsecured paper files lying around in the credit department. The mode of information exchange in the manual process is slow and creates costly delays in the Order-to-Cash cycle. The cost of remedying breached customers’ private information could significantly erode sales and hurt the bottom line.

  • Credit Risk costs

The overall credit risk of a company’s Accounts Receivable/Credit portfolio is a function of the quality of credit decisions reached by the credit department. The quality of credit decisions is a function of the accuracy of risk assessment performed on customers to determine their credit worthiness. A good risk assessment system depends on the collection of complete, accurate and objective credit information subjected to rigorous risk quantification analytics.  Unfortunately, in a manual based system, the tendency for inaccurate and incomplete credit information is quite high given that information is hand filled 90% of the time with no mechanism for information validation. In addition, manual systems lack the capability for rigorous analytical frameworks for determining credit risk from data aggregated from disparate sources. Credit risk cost erodes the bottom line of companies.

  • Customer Satisfaction costs

A happy customer places orders and receives products without delays. Delayed product shipments always results in unhappy customers.  Unfortunately, in manual credit application processing systems, delays in collecting and aggregating customer credit information are prevalent and often lead to long wait times for credit decisions and product shipments. The cost of customer dissatisfaction grows higher for companies with a manual credit process when the competition employs an agile and digital credit management process with faster turnarounds.

  • Working Capital costs

When product shipments to customers are not delayed and customers pay on time, a company’s cash flow is bolstered from sales. Good working capital is a function of a healthy cash flow.  On the other hand, when cash flows are hampered by delayed shipments and customer payment defaults, working capital costs grow as the company would have to borrow to augment its operating working capital/operational funding needs. Unfortunately, in a manual credit process, delayed shipments are prevalent with high potential for poor and inadequate credit risk assessments.

Conclusion

The credit department is on the critical path of the Order-to-Cash cycle. It’s almost imperative for companies to pay attention to the continuous and consistent delivery of the credit department’s functional goals to realize its Order-to-Cash corporate goals.  As the years go by, with more and more companies adopting digital credit management methods, the cost of processing manually has enumerated and will become increasingly detrimental to the overall bottom line of companies.

 

Adapting Credit Operations to Support Complex Organization

Virtually Organize the Credit Department

Often times, credit review activities are aligned with the business structure of a company. For most highly diversified companies, credit operations are organized around operating units and consolidated at the corporate level.  The greater the complexity and diversification of a company’s business structure the more challenging it is to track, account for and report credit transactions.  The Bectran Operations Management and Multi-Business Support modules enable companies to seamlessly adapt their credit operations to support the underlying business structure for both simple and complex/matrix organizations.

Multi-Business Support

The Multi-Business Support capability allows highly diversified and global companies to organize and manage their credit transactions at the business entity layers (divisions, subsidiaries, countries, etc.) and at the corporate or consolidated layer.

Multi Biz

With the multi-business support capability, CFOs, Corporate Credit Directors, Treasurers are empowered to review and account for credit management activities at different levels of the company’s operational hierarchy using several key metrics.

Operations Management

On the other hand, the Operations Management module allows credit management activities to be organized by responsibilities and streamlines the Sales/Customer Service organizations with the Credit/Finance departments for effective communications and routing of messages and documents. This is a critical feature for credit departments where daily management tasks need to be organized by credit managers for effective tracking and monitoring of credit management responsibilities, using simple to complex intelligent work queues. The Operations Management feature also streamlines the credit approval process with the internal policy for hierarchical approval of credit requests.

Bectran to Present at the National Electrical Manufacturers Meeting

Learn How to Navigate Common Roadblocks in B2B Credit Management

ITASCA, IL–(Marketwired – June 08, 2016) – Director of Sales at Bectran Nick Foley will be discussing 5 Roadblocks to Efficient Credit Management and How to Navigate Them at the National Electrical Manufacturers Credit Group Meeting at 3:15 PM, Thursday, June 9, 2016.

With more than 15 years of experience in financial services and technology sales, Nick Foley will be bringing insights from his experience working with industry leaders exploring options to streamline their credit management process.

The National Electrical Manufacturers Credit Group is one of the groups of National Association for Credit Management Midwest (NACM Midwest). The group includes members across the United States and have a strong regional presence in the US or Canada. The meeting’s sessions will be held June 9th through 10th, 2016.

The attendee list for the National Electrical Manufacturers Credit Group Meeting includes Kichler Lighting, Service Wire Company, Inc., United Cooper Industries, and many other notable companies.

As you know, networking with industry leaders gives knowledge, perspective, and the direction of the industry. Add the insights from Bectran, and you have a strong reason to attend.

We look forward to networking with credit personnel in the electrical manufacturers industry and Nick Foley will be happy to answer your questions on B2B credit management. Use this as an opportunity to gain new insights into your business.

ABOUT BECTRAN

Bectran, the industry leading SaaS platform, has grown rapidly over the last five years to become the companion toolkit for the Credit Department just as CRM is for the Sales Department. From simple to complex organizations, SMEs to Fortune 500 companies, Bectran has helped companies cut down the time to process and approve credit by over 90% whilst significantly lowering the risk of credit defaults and the cost of collections. Our customers enjoy the ease, speed, and cost-effectiveness of adopting the Bectran platform. New clients are on-boarded in matter of days/weeks. Credit Professionals in various industries have described the Bectran platform as the future of the credit department. Recently, Bectran was recognized as a top innovator in the credit software industry.

Bectran Provides a Fresh Look at Shortening the Order-to-Cash Cycle

Bectran Notes Important Points Made Throughout Discussions in Sessions, and the Ideas That Were Brought up for Future Intelligence Within the AR Department

ITASCA, IL–(Marketwired – June 03, 2016) – Following the conclusion of the Accounts Receivable & Order-to-Cash (ARO2C) Conference, organized in Florida between May 24 and 26, 2016, Bectran is pleased to note that the conference was a tremendous success.

The exhibitors noticed a 50% increase in attendance prior to last year’s conference, which led to avid networking opportunities and extensive sessions. The sessions focused on improving leadership, team management, and the order-to-cash process.

Judy Bicking, Senior Trainer of IOFM, former Shared Services Director at Johnson and Johnson, led many of the sessions including talks on “Taking the Fear Out Of Managing Personnel Problems,” and “Re-Engineering the Order-to-Cash Process.”

Darin Ball, VP of Credit and Collections at DS Services, also shared his experience on how connecting personnel in this day in age leads to team success. He discussed how in current years shopping on Amazon and liking things on Facebook have bridged generational gaps, and that companies can drive success through teams oriented along these lines.

Eric Lee, Business Development Manager, Bectran, joined the panelists from Basware, Billtrust, and Creditron to discuss the future of accounts receivable automation. The panel discussed automation of the credit process, usage of artificial intelligence and robotics eliminating many areas of data capture, management, and analysis, and tools that talk to multiple systems via multiple interfaces.

The Bectran team looks forward to attending next year at Disney Yacht Club May 12-14th.

ABOUT BECTRAN
Bectran, the industry leading SaaS platform, has grown rapidly over the last five years to become the companion toolkit for the Credit Department just as CRM is for the Sales Department. From simple to complex organizations, SMEs to Fortune 500 companies, Bectran has helped companies cut down the time to process and approve credit by over 90% whilst significantly lowering the risk of credit defaults and the cost of collections. Our customers enjoy the ease, speed, and cost-effectiveness of adopting the Bectran platform. New clients are on-boarded in matter of days/weeks. Credit Professionals in various industries have described the Bectran platform as the future of the credit department. Recently, Bectran was recognized as a top innovator in the credit software industry.

Bectran to Co-Sponsor CreditScape Spring Summit in March

Showcasing the 21st Century B2B Digital Credit Management Platform

ITASCA, IL–(Marketwired – February 22, 2016) – Bectran, leading provider of the industry standard B2B Credit Management Platform, is excited to co-sponsor this year’s CreditScape Spring Summit, hosted by the Credit Management Association, which will be held in Newport Beach, CA, March 24-25, 2016. This year the Annual Meeting will focus on “The Efficient Digital Credit Department”, and will feature two days of workshop training and networking events for credit professionals. This conference will offer credit practitioners of varying levels of expertise the opportunity to exchange insights with their colleagues on some of the key strategic and operating challenges in their everyday credit management activities.

Learn more about CreditScape and register for the event.

In today’s fast changing business landscape, speed is critical for success. Credit departments that approve credit faster for their customers do more business than their slower counterparts. The reality is that most credit departments still operate at manual speed because their credit process is manual with lots of paper work. The Bectran digital platform helps companies transform their credit departments into the 21stcentury electronic office processing transactions at electronic speed.

Over the years, Bectran clients have grown consistently their base of happy customers and reversed the years of poor credit performance prior to the adoption of Bectran. Our clients have seen increased and faster collaboration amongst their sales team, customer service, credit departments, customers and other stakeholders, resulting in faster resolution of credit issues of varying complexities. Overall, within the first 6 months of adoption, 99% of our customers have achieved significantly shorter credit-to-cash cycle with higher quality receivables. Capabilities offered include: Electronic Credit Application System, Reference Automation, Credit Scoring & Risk Analytics, Portfolio Reviews, Credit Operations Management, Global Credit Management capabilities, Decision Automation, Credit Workflow, Document Management, etc.

One of Bectran’s esteemed clients will also be heading a discussion on utilizing an online credit management workflow system. As a Credit Director from a Fortune 100 company with over 15 years of experience, she will be sharing her practical knowledge of adopting a digital work environment, and how to overcome obstacles, as well as how customers may react to the new technology environment. She will also be our guest for a “meet and greet networking event” to talk about her experiences in a more intimate manner.

Bectran is pleased to continue a strong partnership with the CMA and the opportunity to meet with credit professionals from all over the country.

ABOUT BECTRAN

Bectran, the industry leading SaaS platform, has grown rapidly over the last five years to become the companion toolkit for the Credit Department just as CRM is for the Sales Department. From simple to complex organizations, SMEs to Fortune 500 companies, Bectran has helped companies cut down the time to process and approve credit by over 90% whilst significantly lowering the risk of credit defaults and the cost of collections. Their customers enjoy the ease, speed, and cost-effectiveness of adopting the Bectran platform. New clients are on-boarded in matter of days/weeks. Credit Professionals in various industries have described the Bectran platform as the future of the credit department. Recently, Bectran was recognized as a top innovator in the credit software industry.

Bectran Automates Instant Credit Intelligence Data Gathering From Credit Bureaus Worldwide

ITASCA, IL–(Marketwired – December 15, 2015) – Cloud-Based B2B Credit Management Platform Company, Bectran, announced today the release of the Instant Credit Intelligence Data Gathering Automation capability for major Business Credit Bureaus worldwide. This capability significantly cuts down on the time to reach quality credit decisions thus shortening the Credit-To-Cash cycle.

Delegating everyday credit management tasks to automated software processes has remained the founding core of the Bectran Platform. Credit Intelligence data gathering is time consuming and costly. The time to attain a credit decision on a customer and the quality of credit decision reached continues to drive the success of the B2B Credit Process and thus the Credit-To-Cash cycle time. With the Instant Credit Bureau Data gathering capability, credit departments automatically receive customer credit intelligence data in digital format from credit bureaus of their choice when a customer submits a credit application using the Bectran Electronic Credit Application System (ECAS). Customer Credit Bureau Data are automatically fed into the Bectran Custom Scoring Models to determine a comprehensive credit risk profile of the customer within seconds of a customer submitting a credit application.

“This is again another Auto Pilot feature on the Bectran platform that is at zero cost to end customers with significant task-time savings for the credit department,” said Louis Ifeguni, CEO of Bectran. With automated credit intelligence data gathering, credit departments are able to quickly learn about the credit risk profile of the customer and reach higher quality credit decisions in significantly shorter times.

Here is how it works:

The customer fills out a credit application using the Bectran Electronic Credit Application System (ECAS). The ECAS automatically verifies the accuracy and completeness of the credit application based on the underlying credit policies of the client. Bectran automatically pulls the client’s preferred credit bureau data in digital format, organizes and stores the credit data in custom virtual filing cabinets. The Bectran Custom Credit Management Workflow aggregates all credit significant data on the customer and performs instant evaluation using the client’s Custom Scoring Model.

Bectran continues to lead the front-end B2B Credit Management Solutions Industry in SaaS platform innovation with this additional Auto Pilot feature.

Bectran, the industry leading SaaS platform, has grown rapidly over the last five years to become the companion toolkit for the Credit Department just as CRM is for the Sales Department. From simple to complex organizations, SMEs to Fortune 500 companies, Bectran has helped companies cut down the time to process and approve credit by over 90% whilst significantly lowering the risk of credit defaults and the cost of collections. Their customers enjoy the ease, speed, and cost-effectiveness of adopting the Bectran platform. New clients are on-boarded in matter of days and weeks. Credit Professionals in various industries have described the Bectran platform as the future of the credit department. Recently, Bectran was recognized as a top innovator in the credit software industry.