Measure the performance of credit management within your organisation
Developing a full understanding of the performance of your credit management can result in great benefits. Through comprehensive and effective data analysis, it enables credit management teams to spot their own strengths and weaknesses, and use that information to implement better processes and policies. A popular method to do this is benchmarking. Read on to find out what benchmarking can mean for your organisation for better credit management.
What is benchmarking?
In essence, benchmarking is gathering and analysing data that allows you to compare performance to optimise processes and insights for the future. There are different ways of going about this:
- Internal benchmarking involves comparing your own credit management function to another in the same industry.
- Functional benchmarking compares internal functions such as credit management with peers in other firms across any industry.
- Competitive benchmarking involves directly studying competitors.
How to start?
Different benchmarking methods all adhere to the same basic principles and it is key to take a methodical, realistic and practical approach to the process. Your starting point? Your own organisation’s business objectives, followed by the decision where credit management fits in and where it can help to achieve those goals.
The next step is to establish targets. It can be a difficult and lengthy task but is crucial to the long-term strategy. Develop simple, specific and measurable goals. Lastly, collect information to get a sense of how your credit management function is progressing towards these aims.
Meaningful data for better credit management
Within your organisation, the best way to gather internal information is through comprehensive data capture. Integrated credit management supported by the right software platform allows companies to bring together rich information from across the organisation.
Credit management teams can then analyse and interpret that information to get a good sense of their progress. After determining where the strengths and weaknesses lie for credit management functions it is now time to act on them. Learn from best practices elsewhere, implement a continuous process of evaluation, and start your successful journey towards better and more effective credit management in the future.
Your next steps
By boosting efficiency and improving outcomes, businesses can save huge amounts of time and resources that would have otherwise been spent on ineffective processes and potential financial loss. Taking stock of where you want to go, how to get there, and how to make sure it happens effectively is the best way to guarantee stability and agility for credit management teams.