How to benefit from your credit
management?

Money blocked in accounts receivable is an important consumer of working capital. An efficient credit and client portfolio management strategy, ensures timely payment by your customers. That has a positive effect on your working capital as well as on the health of your company.

Protect your working capital

Invoices paid too late or not at all are a direct attack on your company’s liquidity. Reducing payment defaults is and remains a priority for your company in order to keep more working funds. The faster the payment, the shorter the cash conversion cycle (the time funds need to loop through your exploitation cycle) and the smaller your working capital requirement. The more certain you are to get paid, the less risk you run. Therefore, optimise your receipts and reduce your need for working capital.

1 in 4 bankruptcies are due to non-payment

(Source: Euler Hermes Global Economic Outlook)

Choose an integrated approach

Why would you spend precious time and effort to gain customers who pay either late or not at all? Map out your potential customers worldwide and make a strategic selection.

Credit management places customer relations management within a broader commercial framework. Customer credit is part of an integrated sales and marketing strategy. Credit management allows marketers, sellers and credit managers to work together in order to sustainably and profitably sell to customers who pay their invoices on time. Moreover, a credit insurance policy is the perfect instrument to offer better payment conditions.

An integrated credit management strategy reconciles the sometimes conflicting responsibilities of the commercial department (marketing and sales), which wants to realise as many leads and sales as possible, with the financial department, which strives for a maximum return with as little risk as possible.

The result of an integrated approach is a strategic vision that directly links turnover growth and maintenance to profitability growth based on sustainable and profitable customer relations.

Keep your working capital under control

Intelligent credit management is just one way to keep your working capital healthy. Effective supplier management, efficient inventory management and smart customer management also ensure that your need for working capital remains under control (read: stay as low as possible).

Download the white paper on working capital and find out all about it.