What is credit management?
The difference between debtor management and credit management
Debtor management and credit management are often used interchangeably. Credit management is a relatively new and emerging concept, mainly known in the United States. It aims to streamline financial handling, including debtor management, and minimise risks in this area. Read everything about credit management below, or take a look at what credit control software can do for your business.
Credit management must optimise, manage and control a company’s cash flow, both operationally and financially. Credit management overlaps with debtor management and goes just a step further in the process of controlling and optimising cash flows. The main field of credit management includes three main areas, namely: debtor management, credit information and debt collection.
Outsource credit management
With good credit management: credit risks are discovered at an early stage, the debtor balance is reduced, and outstanding receivables are usually paid earlier. This results in optimal cash flow and liquidity.
You can easily achieve good credit management by using cash collection software. You can link this software to systems that you may already use. Think of invoicing-, accounting, and CRM systems. The software makes it possible to send invoices and reminders fully automatically, and to communicate with your debtors. Also see debtor management.
For efficient credit management it is also important to know about the creditworthiness of your debtors. This gives you the opportunity to discuss this with you debtor and make arrangements to ensure that the invoice is still paid.
Payt’s software also gives you the opportunity to start a debt collection case. This is a method to still collect your invoice if your debtor has not paid after the last reminder.
Enjoyed reading this wiki?
Go on, give it a share on social media and spread the knowledge.