Innovation as a source of value for Credit Managementpost-author - Tue 09 Mar 2021 - innovation , credit management
In previous articles we have seen what we mean today by innovation in Credit Management and how processes' digitalization is the path that a company should take to improve in efficacy and efficiency and, ultimately, to create value.
Credit Management is definitely a source of risks and costs. However, we know that costs and risks that your company has incurred until now, your competitors have incurred and go on incurring them too. Therefore, they aren't a problem only for you, but they represent a common ‘burden' for all companies.
Credit Management activities bring with them not only risks and costs but, if managed well, which means in an efficient way, can represent a source of value. Value that is achievable through digitalization, or better, by adopting an industrial approach to processes.
Credit Management processes' digitalization leads to manage credit in an efficient way and this brings several advantages to companies in terms of:
- decrease of working capital and increase of financial resources
- costs reduction and increase of marginality
If a company pays a careful attention to processes, it could improve its economic-financial situation, having at its disposal more resources (and more liquidity) that, despite being available, they were ‘locked' in working capital.
In other words, making credit management processes more efficient, businesses could collect in less days, reducing DSO, and have at their disposal more liquidity usable for investments, acquisitions, decrease in indebtedness.
In conclusion, the cultural change we hope for is that companies see Credit Management as a strategic sector on which intervene to create value, thanks to an efficient processes' management, with all benefits deriving from it.
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