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Finance Transformation – Why Not Start With The Electronic Credit Process?

Posted on: June 30, 2016

finance transfor

A critical process

Finance transformation is on the mind of every successful finance executive today. Order to Cash is the most critical process for businesses today, yet it is one that rarely gets noticed. Why is Order to Cash so important? Because it encompasses the heart and soul of your business. It is the end-to-end process that covers your entire sales lifecycle; from customer onboarding through negotiating and signing the contract, to managing invoicing, billing, orders, and revenue recognition. Often the most commonly thought of areas to begin the automation process are electronic bill presentment and statements. A streamlined Order to Cash process makes “closing deals” a highly effective and integrated process that can be managed, irrespective of global location. So why not begin at the beginning…with the credit process.

Where do you begin?

While there is no doubt that face to face contact is valuable, allowing potential customers access to automated onboarding systems can provide greater security and convenience for some potential customers. In a recent article on customer onboarding best practices Paragon Solutions stated that “By making an online account opening process available, your firm can often reach a wider audience of individuals interested in your financial services.” When evaluating your current processes you will likely come to the conclusion that the Credit Application process is not only the best place to start, but the area that is most cost-effective and able to provide a rapid return on your investment.

In a recent webinar we asked participants how long it took from credit application submission to approval. More than 55% of the respondents said that it took them longer than 2 days, with more than 13% stating that it took them longer than a week. That first experience with a new customer sets the tone for the entire relationship. If it is difficult, overwhelming and otherwise creates challenges for your customer you can guarantee a strained relationship. Electronic credit applications provide you with an inexpensive, easy and effective way to not only manage risk, but provide for a happy and satisfactory experience for new customers.

What should I expect from an electronic credit application?

Our experience at Emagia has helped us to develop a comprehensive list of the required elements for the digitalization of your modern credit department. Start with an online self-service credit application that allows digital signatures and reference checks and provides your customers with easy access. Incrementally, you should look at automating every step in the process such as credit scoring, credit limit approvals and periodic portfolio review. Products like thecreditapplication.com not only help you take that first steps to go digital in minutes with click-n-configurable electronic credit applications specific to your business, it also helps you to incrementally transform from a manual process to an end-to-end electronic credit process.

Why start here?

In a recent poll conducted by Emagia, 78% of credit departments mentioned that the majority of their time is spent on either making sure the credit application is accurate or on following up on credit limit approvals. Electronic applications allow you to set the required fields to be completed, which documents need to be attached, get your terms and conditions accepted as well as receive fully completed and digitally signed credit applications in your inbox. All of this is accomplished in a short amount of time with the push of a button. Used in conjunction with automated credit scoring and workflow routing, good customers can be on boarded in a matter of minutes. Approval times have been known to be reduced to less than 24 hours. For a relatively low cost you can accelerate the sales cycle and free up your credit team to spend time on higher impact areas of the business.

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