Power up your ERP for flexible credit management


An Enterprise Resource Planning (ERP) system is a powerful tool for credit management and most companies, of all sizes, are now implementing ERP, according to a recent report.

However, whilst an ERP system has many benefits, the majority of these systems are less innovative and flexible than specialist software. They also don’t offer the same level of personalisation and functionality. As a result, during these uncertain times, in particular, using an ERP on its own can put credit managers at a disadvantage. This was highlighted in our latest FinTech Barometer research, which found that the additional pressures of the Covid-19 crisis have led over a third of finance professionals (35%) to believe that their organisation lacks the specialist software required for efficient working.

A lack of flexibility makes it difficult to adjust credit management strategies – something that’s been vital for many businesses to respond to rapidly changing circumstances. Finance professionals relying on ERP systems alone are faced with numerous shortcomings, such as the length of time the credit management process takes to complete. This is because more than half (55%) of finance professionals still rely on programs such as Excel and Numbers for their credit management on a daily basis.

There is also the time-consuming process of accurately collecting large amounts of data, and then being able to store all of this data so it can quickly be retrieved when needed. Only 35% of finance professionals use specialist credit management software to automate processes, with the remainder relying on ERP systems or not having a dedicated system for debtor management. The additional time needed to be spent on manually carrying out repetitive and mundane tasks such as collecting data could be better spent on value-adding activities to drive the business forward.

That is not to say that the solution is to overhaul an existing ERP system entirely, and understandably, for many this would be an off-putting though. Instead, specialist credit management software can be used in tandem to enhance existing systems. This enables you to do even more without having to change the tools that the rest of your organisation uses when it comes to issues like dunning, chasing up payments, negotiating terms, reporting, managing data and processing accounts receivable.

All these tasks can be managed effectively and be highly automated. This means you can get payments in as quickly as possible and keep cash flowing smoothly through the business, whilst freeing up precious time and reducing the risk of human error.

Improving ERPs with that missing flexibility

Accessing this improved functionality is even more important during the current period of uncertainty. Companies using ERP systems alone are more likely to have struggled during the pandemic due to the lack of flexibility they offer at a time when organisations should be even more agile in adjusting workflows. In fact, some businesses haven’t been able to adjust their credit management systems and have felt the consequences.

Firstly, the pandemic may have also triggered more organisations wanting to move to cloud-based credit management as they realise that with the rise in remote working, they should store everything in the cloud. Although many customers are unable to move their full ERP to the cloud, which is s till a complex operation, they are increasingly doing this with order-to-cash.

Cash flow is always important, but in today’s challenging environment, with more uncertainty ahead, it’s crucial. Intelligent reporting on cash flow can ensure complete visibility and is a key function of CreditManager and Onguard’s order-to-cash solutions that is not normally a part of basic reporting in ERP systems. Specialised software allows for more complex reporting, incorporating data from not only the ERP system, but also from CRM and other external data sources.

The challenges of standalone ERP

Reporting and flexibility in adjusting workflows are the two key areas where customers using a specialised software solution have a big advantage over those using only an ERP system. However, these are not the only reasons to consider deploying specialist credit management software.

Some of the biggest drawbacks of using ERP alone, and their solutions, include:

  • The time-consuming process of accurately collecting large amounts of data. Credit management software offers a variety of ways to collect useful data, so you can speed up the entire credit management process to focus on other things such as chasing up payments.
  • The inability to incorporate historic data into reports to get the most value from your data. This can be done with a reporting database to use in segmentation, for example, giving you a better understanding of long-term trends.
  • The difficulty of achieving positive communication and faster payments. This can easily be achieved with segmentation to track customer habits and using that information to tailor your approach for dealing with various groups of customers, making personalising your approach to achieve positive outcomes easier.

Supporting credit management now and in future

In the face of the continued economic volatility, leveraging the latest credit management software to enhance your ERP system will not only help you to navigate through the current uncertain period, but will also set you up to be ideally positioned to thrive for the long-term when we emerge on the other side.

If you’re one of the many organisations looking for a way to enhance your ERP, making it more suitable for the order-to-cash process, then Onguard may have the ideal solution.

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