Optimising Order-to-Cash: A Guide for Trade Creditors - Part 2

Part 2: Using data to balance portfolio growth and risk exposure

As supply chain issues and rising energy prices continue to impact UK businesses, managing portfolio growth and risk exposure becomes even more critical in the challenging economic environment. In a recent interview with credit professionals from across the trade credit space, Experian identified data as a key element in addressing these challenges and optimising the order-to-cash process.

The pressure to take on more business can sometimes result in conflicts between credit risk and sales departments, each with their own objectives. However, by leveraging data to improve onboarding processes and identify risk earlier, trade credit providers can strike a better balance between customer volumes and credit risk, and foster collaboration between sales and credit departments to achieve balanced outcomes.

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This collaborative approach should also involve senior management, including Sales Directors and Heads of Risk, who need to agree on collaborative onboarding strategies that balance growth with risk. Data can be a powerful tool to gain buy-in from senior leadership and demonstrate the value of a unified approach.

Strategies for striking a balance

For Customers: Speeding up application processing time by reducing missing information with pre-populated or mandatory data entry fields and implementing digital onboarding platforms for a better and faster data-entry experience.
For Credit Risk Teams: Automating risk and eligibility checks to improve decision-making on acceptance, amounts, and terms, and proactively prioritizing direct debit adoption based on customer credit scores. Credit teams can also support sales by providing insights on existing good customers to help identify similar customer profiles and highlighting the importance of data-driven decisions to senior leadership.
For Sales Teams: Providing access to credit KPIs or common scorecards to improve collaboration with credit risk departments and educating the sales team on credit policy and guidelines to help them understand the importance of targeting the right customers and adopting less risky working methods.

By improving the efficiency of the onboarding process and utilising data to identify affordability early, trade creditors can effectively serve more high-value customers. However, achieving this level of cohesion across departments, job levels, and locations requires a robust data-driven strategy.

How we help trade creditors

In customer onboarding, our data quality tools validate and enrich data for CRM, enterprise resource planning and the Web. Our ‘Market Insights’ can also identify new segments to target.

In underwriting, robust eligibility, risk and affordability products can help businesses identify whether to accept a new customer and suggest reliable, evidenced credit limits. Commercial Delphi is our latest commercial risk score which uses current account turnover data to more accurately assess customer risk.

And across departments, we can create a target client list that only includes potential customers who have been pre-vetted for credit – ensuring your sales team reaches out to the right organisations.