by Martin de Heus, VP of Direct Sales at Onguard

In the worlds of accounting and credit management, many businesses still look to retain largely manual approaches or persist in using generalised software packages that are not specifically dedicated to the job in hand. Unfortunately, by doing this, they will almost inevitably be putting themselves at a serious disadvantage – especially in terms of collecting information about the credit management environment in which they are operating and in making that intelligence available to key decision-makers within the organisation to drive the business strategy moving forwards.

Martin de Heus

After all, in these key areas of a business, in particular, scheduling tasks, tracking orders, organising and sharing data and managing workloads are all vital to long-term success and growth.

The kind of software used to manage these processes, and store the data generated by them, can help define how efficient and effective a business’s credit management function is. Currently, it’s often carried out using spreadsheets alone but typically such an approach is holding buinesses back

Over-reliance on spreadsheets

Sometimes the use of basic standard software is largely a legacy of the past. Basic computer programs were used to get the business up and running and they are often being pushed to their limits by growing businesses today.

Excel spreadsheets, for example, are often used for a host of working processes that they were not specifically intended for. It’s certainly not the case that the software is intrinsically bad – far from it. Microsoft Excel is a powerful spreadsheet program that enable users to do a lot with raw data. The issue with Excel is that it is often the wrong tool for the job that credit managers are trying to do.

After all, spreadsheets are ultimately designed for number crunching, not for storing large volumes of data about customers; their contact details; sales records; payment and history and outstanding balances. It’s a problem that tends to get worse as the organisation grows and the information it stores continues to expand in line with that growth.

Using Excel for tracking credit management when the business is small is certainly convenient and it may even work reasonably well for a little while. Typically, however, it will not take long for the spreadsheet to become weighed down by complexity and this can lead to it becoming slow with errors inevitably creeping into data and functions.

Growing Pains

When businesses are in that expansion phase, spreadsheets can be a source of frustration and aggravation, often slowing the business down and contributing to mistakes as their capabilities are stretched almost to breaking point. Specialist software can help here allowing credit managers to maintain control and ensure even tedious tasks are completed efficiently and to a high standard.

Credit managers will be no strangers either to other standard areas of frustration that impact spreadsheet-fixated businesses. Users feeling that they are having to do the same monotonous tasks repeatedly is generally a sure-fire sign that the business needs dedicated software. From inputting data to carrying out credit reviews to managing late payments, specialist software can make workers faster at their job and bring broader business benefits too.

Another key area is ease of access to information. Business systems are often overflowing with data. However, if users are not able to access that data and process it into useful information, then it is unlikely to helping the business to achieve its end goals.

Even with custom-designed Microsoft Excel sheets, it is typically a manual, time-consuming task to collect relevant data; keep up it to date and make sure it is easily accessible. As a result, the risk of incorrect information, inaccurate financials and cash flow mismanagement is always high. And the consequences of these kind of errors can be severe in financial and reputational terms.

Finding an Alternative Approach

With the right dedicated credit management software, however, organisations and their users can access that data and turn it into intelligence that can help the company survive and thrive. Chief financial officers can, for example, use the data to spot trends, examine growth and monitor progress while credit managers can use it to create a credit scoring model and identify the largest customer credit applications, for example.

The big advantage of the best quality specialist credit management software is that unlike spreadsheets, it has been designed specifically with the credit professionals in mind. That means that it will typically integrate with relevant business systems that the customer has and provide a variety of tools for streamlining workflow.

Moreover, it will automate many everyday tasks like data entry, processing payments and correspondence. Added to this, its specialist nature allows it to provide users with the information they need when they need it and makes it easy to share data across business functions.

In short, this type of software allows credit management users to save time on repetitive tasks giving them the chance to focus on customer service and building long-term-relationships. And that’s important. After all, to do a job well, you need the right tools for the job.