All You Need to Know About Automated Credit Control

what is automated credit

Automation has become a necessary tool in present-day businesses as it helps them increase efficiency and save resources ultimately. Are you wondering what is automated credit and why your business needs this credit automation? If you are considering automating your credit control system in your organisation, you need to look at the benefits of switching to this latest automation process. In this blog, we will walk you through the credit control system and why it is useful for your business.

So, let’s start!


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What is Automated Credit Control?

Being a cash cow in small-to-medium Enterprises (SMEs) is considered a huge success. However, the main hurdle in the way to becoming a cash-rich firm or business is the debt recovery or late payments from your clients and customers.

For this, an automated credit system helps the business track the debt recovery process seamlessly and efficiently. For this, you don’t need to hire anyone or dedicate additional resources for this specific hassle.

Instead, you can use those resources and staff for highly productive activities. It will help your business save additional cash flow for operating activities.


Why is the Credit Automation Significant for the SMEs?

Small and medium-sized businesses cannot survive without extra cash flow in their ledgers and bank accounts due to the execution of day-to-day business processes. As a result, they require a system which expedites the process of late payment recovery.

The clients require follow-ups and reminder emails to make the repayment of loans or charges for using a service. For this, the dedication of a separate person to go to the hassle of reminding them one by one can be time-consuming and will drain the financial resources of a company.

Saving the financial and burdensome effort, credit automation allows businesses to switch towards a more efficient and productive way to get the payments back from clients timely. It will help increase the cash flow of the companies and they can also make early payments to their suppliers. So, they can maintain their bookkeeping optimum and accurate all the time.


How Does the Credit Automation Control System Work?

The credit automation system catalyst the process of debt recovery by putting all the emails and onboarding process on automation. The humans are required only to prepare a template and set the dates and period when the customer will receive those emails.

Confirmation of Order: The digital automation puts the order confirmation with a valid Purchasing order (PO) number.

A Reminder of Pre-Invoice: To avoid late payments, a reminder is sent automatically to the customer before the due date arrives.

First Over-Due Reminder: If a client fails to make an on-time payment due for whatever reason, the credit automation will send the first over-due reminder to the client after the delay of one week.

Second Over-due Reminder: Even if the client fails to make a payment after receiving the first reminder email, the system will send the second reminder with an action-taking reminder.

The Notice of Penalties: The notice of penalties email is dispatched after the failure of client to make a payment after three weeks of the payment.

The Notice of Account Suspension: However, account suspension notification is delivered to the two parties of the creditor and the service provider after four weeks. The client can make the payment within one week of the notification. If he fails to do so, the companies are authorised to suspend their account.


The Bottom Line

Lastly, we can say that this automation of credit is feasible and the most affordable way to recover all your credit payments from your clients. Cash flow is the lifeline of a business and you cannot achieve a cash flow enough to sustain your business without the recovery of payments from your customers.

Credit Control Automation allows you to expedite the process of debt recovery. However, if the client fails to provide a valid email or for some reason the email does not deliver or bounce back, it won’t serve the purpose of sending emails and reminders.


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Disclaimer: All the information provided in this article on What is automated credit, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.