Credit management 2.0: getting started with new technologies and big data for sharper business analytics.
The importance of credit management in organizations
In a previous blog article Eric Van den Broele pointed out the importance of a robust credit management policy in organizations. This position not only gives companies and organizations extra (financial) breathing space by keeping the debtor balance low and realizing healthy working capital, but also makes an essential contribution to many other business functions, such as sales, logistics and production. A good financial follow-up of customers and suppliers offers a company extra turnover and profit.
Eric Van den Broele: “The Covid crisis proves that it is best to involve credit management as early as possible in the strategic-commercial concept of an organization. In economically uncertain times, it is more important than ever to address the most interesting prospects and to keep existing, reliable customers on board.”
Credit manager: from passive controller to active sparring partner
Eric Van den Broele confirms that the credit management function is increasingly evolving from a reactive to a proactive model: “This trend – which cannot be reversed – offers many new opportunities to create extra value in organisations. Gone are the days when finance professionals rely solely on figures and annual accounts to understand what is happening in a company. The breakthrough of new technologies gives credit managers the opportunity – in addition to exploring classical data – to collect (big) data or community data on a massive scale.”
From symptoms to causes
“Credit managers who look at company figures must realize that figures from annual accounts are nothing more than symptoms of problems (such as a lack of solvency or liquidity) with which an organization has been confronted for some time under the skin. However, it comes down to tackling the causes, such as insufficient response to new market situations or inadequate change management. Modern techniques and new data teach us to go further than just numbers, and to trace past causes in the negative course of a company.”
Data as a treasure trove of information about business typologies or behavioral patterns
The possibilities for screening and screening companies and organizations via data are unprecedented. Eric Van den Broele gives some striking examples: “Using data and algorithms we are currently able to identify an entrepreneurial typology based on the language and communication style on company websites (degree of participation, sense of innovation, etc.). In other words: based on big data, we can detect certain behavioral patterns of companies that could commit fraud. With this knowledge, leasing companies, among others, can set to work to anticipate possible risks. A final example: we can show which companies are more susceptible to burnout among personnel, so that HR service providers can address business leaders about this and steer them towards prevention.
Curious about how Erik Van den Broele estimates the impact of the Covid crisis on cash management? What predictions does he make regarding a possible economic recovery? Listen to our podcast ' From credit control through data to “beyond damage control” '.