The benefits of Payt's credit management software

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What is credit management?

Credit management is a relatively new concept and aims to streamline the financial department, including debtor management, and minimise the risks in this area. Credit management should optimise, manage and control the cash flow of a company, both operationally and financially. This is extremely important since it serves to prevent late or non-payment. Getting credit management right reinforces your company’s financial or liquidity position, making it a critical component in your business.

Credit management can be divided in four parts: credit analysis and risk management, cash collection, dispute management, and debtor management. All parts aim to ensure that customers pay their invoices within the defined payment terms. Effective credit management directly contributes to the profit of your company because of lowering late or non-payment, improving cash flow, lowering your DSO, and improving payment behaviour of your customers.

Effective credit management: how to achieve it?

Entrepreneurs are doing their utmost to bring in new customers, but fail in the part when these new customers have to start paying for their products or services. While this is a very important part of doing business. Credit management involves a lot more than just calling and emailing customers to remind them to pay their invoices. Rather, it involves gaining a deep understanding of why your customers do not pay on time and responding appropriately.

You can easily achieve effective credit management by using smart credit management tools. This tool can be linked to other software you already use, such as your invoicing software, bookkeeping software, or CRM system. The credit management platform Payt debtor management software retrieves the necessary information from these systems and follows up invoices fully automatically.

Advantages credit management tools: Payt software

  • See at a glance the outstanding amount. In the Payt platform you can immediately see what the outstanding balance is, in which phase of the billing process a customer is and which invoices require action.
  • Automatic invoice follow up. Payt will automatically start a reminder process with you in full control. From the first outstanding invoice until the last reminder. You can save up to 80% of your valuable time with this feature.
  • Communicate consistently about invoices with your customers. By consistently bringing invoices to their attention, Payt keeps the communication with your customers going which ensures better payment behaviour.
  • Offer different invoice payment methods. With Payt you can offer different payment methods to your customers. You can integrate Paypal or credit card payment in the invoices and in the reminders. This makes the payment of the invoice as easy as possible, which ensures faster payment.
  • Check the creditworthiness of (new) customers. In the smart software of Payt we provide you with information about the creditworthiness of your business debtors. We do this by notifying you via your dashboard in the software when debtors decrease in their credit score. This gives you the opportunity to discuss this with your debtor and to make arrangements to ensure that the invoice is still paid.
  • Set up automated payment plans. More often than not unwillingness is not the cause of an invoice not being paid. A payment plan often is preferable to a collection process. You can easily start a payment plan. You can agree on a minimum amount per plan and switch the plan on and off whenever you want.
  • Invoice financing. You can organise financing of your outstanding invoices via the Payt application (check the availability box whether this is available in your country).
  • Lower your Days Sales Outstanding. Get a grip of your credit management and lower your DSO with Payt credit management platform.

Debt collection process

After a normal invoice reminder process, on average 1 to 3% of your invoices are not yet paid. Of course, this number depends on your sector and on the quality of your product or service. In Payt we will follow up your reminders with a debt collection process. We will add recovery costs according to the country-specific law on debt recovery. And we will add interest costs to your invoice. Because it is your money and your customer, you could consider waiving these extra costs in return for immediate payment. You might have established a long term relationship with a future profitable client.

Anything to get paid without jeopardising customer relations.

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Curious to learn more about how Payt can help improve your credit management? Download our brochure