Business Credit Tools

Business Credit Tools

What is Business Credit Management? In order to make informed credit decisions faster, it is essential that your company monitors and evaluates the creditworthiness of your customers. Every year hundreds of small companies in the world run out of business because they have suffered unpaid invoices from their customers. That’s why it is important for a business to tailor its credit policies depending on market conditions and use business credit management tools to ensure financial stability.

Why credit management is important?

The critical part of every successful business is timely cash flow. Unfortunately, not many businesses pay special attention to credit management. They still think that cash collection and credit management is a part of accounting. Credit management is fundamental to maintaining strong customer-business relationship. If you cannot turn an invoice into cash in a timely manner, then sooner or later you will end with cash collection issues or simply run out of cash all together.

Reduce credit risks with business credit management

Business credit management process consists of three parts. First one is customer assessment, second is securing the payments and third one is cash collection and performance management.

  • Customer Assessment: Know who your client is. Analyze its profit and loss account. Evaluate the financial status of your client before entering into commercial negotiation. •
  • Set the Payment Terms: After completing the first phase, i.e. checking the creditworthiness of your client, set up the credit limit and terms to secure your payments. If you are in B2B business, then determine how to qualify these potential clients for your desired credit terms.
  • Cash Collection & Performance Management: This step is action taken when an account becomes overdue, means your customer has crossed the time set for making payments. Sometimes you may be required to follow debt recovery process when cash collection doesn’t works.

Business Credit Tools: The right way to manage credit risks

If you want to handle credit management tasks more efficiently and accelerate account receivables, then business credit tools are a good way to start. Advantages of credit management tools are: •

  • They help you monitor customers’ credit status.
  • They ensure you that your clients will pay on time.
  • Credit management tools create customer credit reports that can help you understand the risk involved in extending payment terms.
  • They can even help you generate invoices and financial reports.
  • They help you understand customer trends by generating customer portfolio.
  • They accelerate cash collection on unpaid accounts.

As far as financing part is considered, every business decision should focus on one thing: getting paid on time. We, at, work with various small business owners & lenders and provide one easy-to-use platform for all types of business financing solutions. We have often noticed that business owners, who take on all kinds of new projects and sales, assume that they will automatically get paid. However, the fact is financing business is risky and requires your due attention.

Having a business credit plan is important to avoid debt collection situation. Your business credit process should be designed in such a way that can help you identify prospective clients and reduce credit risks through proper client assessment, payment negotiation, correct and timely invoicing, and ultimately credit monitoring.




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