It is important for every company to optimise the size of its working capital. A good cash flow and liquidity can be achieved by improving the credit control strategy. It is important to gain insight into what credit control exactly is and what the difference is with accounts receivable management.
What is credit control management?
Credit control management is a broader concept than accounts receivable management and focuses on streamlining the entire process from order to cash. The foundation for this starts with determining the general terms and conditions, identifying sectors, and gaining insight into payment behavior. In a narrower sense, credit control management focuses on monitoring cash flow, following up on invoices, and checking the creditworthiness of customers. All with the aim of optimizing the company’s cash flow and liquidity as part of the credit control strategy.
Difference between credit control and accounts receivable management
The traditional method of accounts receivable management involves invoicing services and products delivered on account. An expiration date is set on the invoice, and payment must be made by this date. The company keeps track of whether invoices are paid on time. There is always a risk that a debtor is unable to meet the payment obligation. The debtor risk can be limited by applying credit control management, which has a broader scope than accounts receivable management.
Successfully applying credit control management
Credit control and accounts receivable management are thus connected. Using credit control management software is the solution to gain full control and insight into your company’s financial situation. Payt’s accounts receivable management software is so comprehensive that it can be used as a replacement for credit control software.
Credit control software
There are various tasks associated with managing credit control that are fully automated with Payt’s software. For example, with automatic invoice follow-up as well as consistency in the policy of reminders for unpaid invoices. Another important way for credit control is to offer debtors a choice of different payment methods. This makes it easier for customers to use their preferred bank method.
Checking creditworthiness
Furthermore, it is important in credit control to check the creditworthiness of customers. This applies to both new and existing customers where the credit risk varies. Credit control software acts as the manager to provide optimal liquidity and cash flow. It is also possible to schedule automated payment arrangements. Additionally, our software provides financing for outstanding invoices.
Successfully deploying credit control
Payt offers direct insight into debtors and outstanding payments. It is possible to use the software to make notes and communicate with customers. Improving your credit control strategy starts with using the right software. Therefore, request a demo without obligation and benefit from a free trial period of thirty days.