Credit risk management is crucial to ensure timely and accurate collection of receivables. Credit risk management also helps you minimize write-offs and maintain healthy customer relationships.
What is credit risk?
Simply put, credit risk is the risk of loss due to a customer not paying their outstanding balance. More specifically, it refers to the risk to suppliers when customers fail to honor an invoice, hindering their cash flow.
Effective credit risk management helps safeguard critical business interests and mitigate cash flow uncertainties.
Many companies still use manual processes to facilitate customer credit risk management. Analysts mostly rely on agencies and secondary sources to do credit risk analysis.
Best practices for credit risk management
Sage Intacct is one of the leading ERPs in the finance sphere. It complies with major industry standards such as the AICPA and can be configured to manage all your corporate financial risks.
Here are some ways Sage Intacct users can recognize business threats and mitigate credit risk with some out-of-the-box strategies.
1. Credit risk assessment: Best in class organizations leverage automated credit scoring to support risk assessment and forecasting.
Integration with AR automation solutions can help Sage Intacct users auto-assign risk score, risk category, and credit limits using predefined algorithms.
2. Credit limit allotment: Leverage external credit risk information reports and recommend ideal credit limits for different customers. Identifying optimal credit limits helps you maintain strong customer relationships while minimizing the probability of write-offs.
3. Credit utilization tracking: Sage Intacct enabled with add-on tools can help AR teams to track the credit utilization of their customers. With this capability, cross-functional teams can access credit data in real-time from anywhere and are not restricted by any data silos.
It also lets your AR team mitigate risks and stay up-to-date on news and bankruptcy information concerning your customer portfolio.
4. Real-time risk tracking: Centralized dashboard can help you track exposure and credit limit trends. You can also determine your risk levels across a different customer or geographic categories.
Why do Sage Intacct users need to think “out-of-the-box”?
The following are some areas where Sage Intacct users need to look at out-of-the-box strategies to manage their credit risk.
- Sage Intacct does not automate end-to-end credit risk management. Your AR team may have to manually score customers, analyze credit utilization data, and assign credit limits by gleaning secondary information from credit risk agencies such as Dun & Bradstreet, Hoovers, and others. Predictive features to determine the probability of default are also limited.
- Sage Intacct may not always be up-to-date with the latest credit risk data. The most recent credit risk-related events may not appear in the credit reports downloaded from Sage Intacct ERP. This can hinder your team’s ability to foresee potential credit risks. This may also lead to increased bad debts and inefficient strategies to prevent delinquencies and revenue leakage.
How do we help?
To be fully successful in minimizing credit risk and ensuring timely cash flows, you need to have much more than the basic AR management features.
Our RadiusOne Credit App enables AR teams to automate credit scoring and credit risk evaluation to standardize the credit approval process. We help you make faster and more accurate credit decisions.
RadiusOne Credit Risk App seamlessly integrates with Sage Intacct and helps your finance team fast-track credit management processes and focus on other strategic functions.
How HighRadius Credit Risk Software Helps Improve Credit Risk Assessment
HighRadius Credit Management Platform helps mid-market finance teams automate credit decisioning, standardize risk evaluation, and gain real-time visibility into customer exposure without increasing analyst headcount. Built for organizations scaling beyond spreadsheet-driven approvals, the platform combines AI-driven credit scoring, automated workflows, and continuous monitoring to accelerate onboarding, reduce manual reviews, and improve control over credit risk.
With real-time credit risk management tools and AI-powered credit management solutions, finance teams can receive alerts for changes in customer credit profiles and make faster, data-driven decisions using unlimited credit reports. The platform integrates with ERP systems and can begin monitoring customers in as little as 30 days.
- With real-time credit risk analysis software and credit decisioning software, you can receive alerts for any changes in your customers’ credit profile and make data-driven credit decisions from unlimited credit reports. Our software integrates with your ERP system and can start monitoring your customers in just 30 days.
- We offer configurable credit scoring software and approval workflows that can be customized based on geography, customer segments, business units, and other factors. You can fast-track credit approvals through complex corporate hierarchies, making the credit application process more efficient and streamlined.
- Our highly configurable online credit application allows you to onboard customers across the globe with multi-language, customized credit applications embedded on your website. You can automatically capture financials, personal guarantees, and check bank references, reducing the need for manual data entry.
- Our software also automatically extracts credit data from over 40+ global and local agencies, including credit ratings, financials, and credit insurance information. You can configure the auto-extracted data in your preferred currency, making it easier to analyze and interpret.
- With AI-based blocked order management, you can auto-predict blocked orders based on the customers’ credit limit utilization and payment history. You can leverage AI-based release or partial payment recommendations for faster credit decisions, reducing the need for manual intervention.
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