Credit Management Online: How to Implement Digital Credit Management Strategies

Today’s B2B buyers’ expectations are high. Everyone wants to be able to easily shop online, expecting a frictionless experience. To survive, B2B companies must meet or exceed these demands throughout the entire customer journey.

For B2B companies, that means offering buyers the option to use traditional B2B payment methods digitally. That includes implementing credit management online capabilities into their B2B eCommerce platform.

Credit management online may be intimidating for many companies—particularly those that are new to B2B eCommerce. And there may not seem to be an obvious path forward for executing this plan.

But in reality, technology today makes it easy for companies to better and more effectively manage credit online.

The Digital Transformation Shift

The COVID-19 pandemic forced companies of all sizes, and in all industries, to implement work-from-home policies to mitigate the threat of employees and customers getting sick. And for many companies, eCommerce was the power behind those remote-work initiatives. As a result, companies that hadn’t yet fully embraced eCommerce strategies—or were still in the early stages—had to quickly ramp up their digital transformation efforts.

According to a recent report by Gartner, the swift move to long-term remote working has forced companies to accelerate their digital transformation by at least five years through to 2024. As a result, companies are investing in technology. The report noted enterprise software spending is expected to reach $505 billion in 2021. Directly related to businesses expanding their remote-working initiatives, spending related to remote work will increase by nearly 5% worldwide this year.

Certain business sectors have a greater potential for adopting longer-term remote working policies, according to a recent study by McKinsey. Using the time spent on different activities, McKinsey found that finance had the highest potential for remote work. Three-quarters of finance workers’ time is spent on activities that were easy to do remotely without lost productivity.

Finance professionals perform a lot of time-consuming manual tasks. But through digital transformation, many of those tasks can be automated—making their execution faster and often much easier to manage remotely.

Why Switch to Credit Management Online

As a part of these increasing digital transformation efforts, more B2B companies are switching to online credit management, which offers several key advantages:

1. Online credit management is easier and faster for both buyer and seller.
   Because the process is automated, the application and approval process is not only streamlined, but it’s also much faster than a manual credit management. Online credit management also means both the buyer and seller has better data visibility.
   
2. It improves cash flow management and reduces accounts receivable turnover.
   Online credit management helps detect late payments earlier—reducing the amount of late payments a company receives—ultimately preventing bad debts. It also helps to inform decision-making around financial strategies because it allows companies to more easily plan and analyze their performance. And, because it’s all automated, companies can collect on debts much faster than through manual methods.
   
3. Businesses reduce day sales outstanding (DSO) and time spent on manual tasks.
   Online credit management uses cloud-based interfaces, which are generally user-friendly, convenient and fast.
   
4. Online credit management helps prevent incidents of fraud.
   Online credit applications effectively identify fraudulent accounts because they contain data points that act as digital fingerprints—making fraud detection much easier.
   

How to Transition to Credit Management Online

Innovation in eCommerce technology today is moving at a fast clip. With B2B eCommerce becoming table stakes, the technology to offer those traditional B2B experiences online have flourished. And that includes tools that enable online credit management.

Partnering with TreviPay makes the switch to online credit management and its ongoing execution easy for any company. And you start seeing the benefits almost immediately.

TreviPay automates the credit application and approval process. This means companies are able to extend lines of credit almost instantly—drastically speeding up the sales process.

Our solutions also enable sellers to receive payment quickly—often within 48 hours of invoicing. And TreviPay manages all invoicing, collections and customer disputes. By outsourcing a large portion of tedious accounts receivable functions to TreviPay, finance professionals can execute manual tasks—such as buyer approval, underwriting, credit lines, onboarding and collections—faster than ever. This allows teams to focus more intently on revenue-generating opportunities.

Fraud prevention is also simple with TreviPay. We screen online applications for fraud using several tools, such as Fraud.net and LexisNexis, as well as our own internal fraud protection technology. These tools use and analyze data from previous incidents of fraud—aggregating location data, buyer name, email address and other identifiable information to accurately determine the fraud risk. If we detect an issue, we remove the buyer from the automated process. All of this takes only a matter of seconds. And when the system identifies an application as potentially fraudulent, a credit or fraud analyst steps in to examine the data more closely to assess and manage the application.

There has always been risk involved when it comes to extending lines of credit to B2B buyers. That risk is now exasperated by the economic uncertainty brought on by the COVID-19 pandemic. But with a strategic approach to online credit management, B2B sellers can preserve their business’s financial health and maximize working capital.

TreviPay can help B2B businesses implement credit management online best practices and technology. Schedule a demo today to get started.