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  • Writer's pictureCaroline Lyons

Reducing risk in Collections Management

The importance of reducing risk in collections management

Exposure to risk is a very real issue for businesses the world over and, particularly for those conducted on credit, that risk involves the possibility of not being paid to terms, or worse, not being paid at all.

So, here, we’ll discuss the importance of reducing risk in collections management and how to achieve the elimination of risk with the help of CreditForce 360 Protection.

Broadly, risk in collections management refers to the possibility of not being paid on time, not being paid the right amount, or not being paid at all, and this is why it’s so important to reduce risk or - ideally - eliminate it entirely.

As such, risk reduction in collections management can lead to several key benefits, including:

  • Reduced Days Sale Outstanding (DSO)

  • Increased productivity

  • Optimised Accounts Receivable (A/R)

  • Reduced Average Days Delinquent (ADD)

  • Improved Collection Effectiveness Index (CEI)

Risk reduction can be achieved through the CreditForce 360 Protection interface.

CreditForce 360 Protection and risk

The CreditForce 360 Protection interface, combined with your preferred credit rating agency i.e. Creditsafe - provides a comprehensive and cost-effective way to apply:

  • Credit ratings

  • Recommended Credit Limits

  • Obtain regular updates

All to enable you to fully understand and visualise the payment performance and financial standing of your clients.

Automated notifications allow your team to keep up with any changes in the financial status of your clients, where i.e. Creditsafe provides details of your customer’s financial metrics, including risk rating, credit score, delinquency, business sector, recommended credit limit, financial headline figures, global structure and much more. Alongside this, 360 offers a monitoring facility with Creditsafe, and changes in client circumstances will be emailed and loaded into CreditForce automatically.

What’s more, having access to Risk Rating reports is essential to help you perform critical analysis of your clients and the risk you face in extending credit.

The advanced data handling capabilities of CreditForce 360 can process millions of accounts and enrich the quality and comprehensiveness of information in your Accounts Receivable Ledger.

Access Agency Report information including:

  • Risk evaluation and payment performance

  • Financial statements

  • CCJ’s (County Court Judgements) and

  • Industry sector

In short, reducing risk in collections management can lead to a wealth of business benefits and, with CreditForce 360 Protection, reducing risk at the source is easily achievable.

To learn more about CreditForce 360 Protection and other supporting modules & interfaces in the CreditForce range, request a demo.

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