From Excel to credit management software: how to make a business case

From Excel to credit management software: how to make a business case

Dutch companies are among the fastest payers in the world. According to a recent news report, Dutch companies pay invoices within 46 days. In theory, this sounds like good news! However, in practice, this means that companies are waiting almost one and a half months for payment of an invoice and their credit managers are spending a lot of time getting customers to pay. It is time to take an in-depth look into this process as it is important for every business that invoices are paid faster and on time. Indeed, if payments are made faster the whole economy can benefit too.

Inefficient processes

The economy has begun to recover and return to full speed. Companies have more turnover, are making a profit again and are able to pay their accounts faster. But how can a credit management department ensure that customers actually do pay faster? The solution is an efficient Order to Cash process, but not every company has one. Often companies use Excel, a tool not really built for complex, variable databases. This can result in lengthy processes and errors being made. Furthermore, it is difficult to get a good overview of the available data. Specialised credit management software can help a company to be more efficient, keep the entire process in order and reduce the days’ sales outstanding.

Convincing the CFO

A good way of introducing credit management software to a company is to set out clearly how the software can help the organisation. CFOs are often more inclined to agree to a project if they can see that it will save time and money. With the following approach any credit manager can make a good business case for credit management software:

  • Make an inventory of software options and costs

When introducing credit management software, start by making an inventory of the software options that match your company’s needs. For example, determine how many employees require the software and what specific functionalities each employee needs. This forms the basis for working out a price for the organisation.

  • Set out all the advantages clearly

Credit management software ensures that certain processes are automated. This gives the credit management team more time to focus on higher priority tasks or more complex issues. In addition, credit management software ensures that the Order to Cash cycle is improved in various ways.

For instance, the software reduces credit managers’ administrative load and gives them more time to contact customers. The software can also ensure that tasks are equally divided between the credit management team and that each customer receives an approach tailored to them. These processes further ensure that the liquidity of the company is increased.

In addition, the software can offer valuable insight into your own organisation. By analysing the data available from the software, it is possible to gain rapid and detailed insight into your performance status. This helps to highlight where there are difficulties and thus allows you to tackle them head-on.

  • Weight up the costs and benefits

Once the costs and advantages of implementing credit management software have been mapped out, it is time to make an inventory of the specific objectives that the software will contribute to. Common objectives for companies include greater customer satisfaction or cost savings. In addition, it is important to establish when the software will actually deliver real value after implementation.  Get advice from the software provider and discuss the turnaround time of the project.

To sum up: making a business case for credit management software is extremely valuable. First of all, decide what software options are needed, consider all the advantages, and weigh up the costs against the value that it will deliver for the organisation. By taking these steps you will get a clear picture of the benefits of implementing credit management software and how the Order to Cash process can be set up efficiently.

Only then can the Dutch be really proud of the speed with which customers pay their invoices in the future.

“Use your time to nurture your customer relationship, not in chasing payments”
MARTIN DE HEUS – VP Sales