Equipping yourself with credit risk management tools is no longer an option. In an increasingly complex economic context, full of data, interlocutors and business scenarios, there is no company that can feel exempt in this sense. Unless it has no interest in growing, developing and becoming increasingly competitive.
But what does it mean in concrete terms to become operational in terms of credit risk management? Where do you start from?
Let’s consider a premise: every company today boasts an invaluable asset, given the information it possesses and the underlying opportunities to benefit from it in terms of business. A quality data represents a valuable value for the company, because it allows it to react flexibly and dynamically to market demands, avoiding to miss important opportunities. In order for this data to become competitive levers, the company must work accurately on Data Quality, cleaning up the information in the information system. At the same time, it will have to check the regularity of its processes to avoid that errors, even in the presence of correct data, may occur or recur in the future. Therefore, having done this, it must equip itself with codified procedures capable of establishing new concrete values for the business.
Credit risk management and corporate organization
Once this “cleaning” process has been completed, the company will be ready to take full advantage of the information tools and data it has at its disposal. The technological possibilities, in this sense, are becoming increasingly extensive: there are now numerous systems, modules, software and tools that meet the growth needs of a potentially successful company.
Among them, a leading role is certainly played by a good invoicing system, which not only allows to better manage the whole business process, but also to work on Data Quality. Thanks to the latest technologies, in fact, such a tool can be advantageous from several points of view. Particular applications and indicators can start from here to provide the entrepreneur with the ability to understand the customer’s risk status: the fact that the conditions for paying the invoice are in place. In other words, by managing and archiving quality data, and using dedicated technological tools, the company will be able to control its risk and request advance payment of invoices.
Avoid losses with a technology platform
Credit risk refers to the probability that the company will incur a loss due to a creditor’s debts. Credit risk management, in this context, is the ability of the company to mitigate losses by understanding the adequacy of the client’s capital. By equipping itself with those technological tools that, for example, starting from the electronic invoicing system, allow it to work on risk assessment – i.e. assessing the creditworthiness of the customer – the company will be able to obtain competitive advantages on many fronts.
How it can improve your business
For example, a good platform will be one that, starting from the invoicing system, will be able to cross Data Quality and Credit risk management, allowing the company to boast previously unimaginable potential.
- check the health of your credit (by going into the information you are interested in at all times);
- monitoring the creditworthiness of customers and suppliers (significantly reducing the risk of default);
- analyse the market (by consulting the reports of the companies that populate it);
- obtain a credit score in real time (the rate of risk of customers and suppliers);
- operate with the certainty of having correct data in the management system;
- manage the advance payment of invoices.
In absolute terms, the competitive acceleration that a company will be able to express thanks to a tool of this magnitude will be decisive. Able to move quickly to the heart of the market, forgetting the cumbersomeness of non-dematerialised businesses. And able to emerge in the challenges of the context that surrounds it.