3 ESSENTIAL QUESTIONS TO ASK BEFORE BUYING CREDIT MANAGEMENT SOFTWARE

3 ESSENTIAL QUESTIONS TO ASK BEFORE BUYING CREDIT MANAGEMENT SOFTWARE

Businesses who utilize credit management software as a part of their overall credit and collection strategy stand to recognize some pretty impressive benefits; such as a reduction in DSO, improved cash forecasting, reduced financing costs, to name just a few. While the benefits of credit management software are many, don’t pull the trigger on that purchase until you have asked yourself the following questions:

DO YOU NEED B2B OR B2C CREDIT MANAGEMENT SOFTWARE?

Credit management software solutions can be specialized for either business to business (B2B) or business to consumer (B2C) credit and collections. While both areas share many commonalities, they are drastically different in many respects. For example, credit reporting and credit scores are very different in B2B compared with B2C and collection strategies and technologies also vary widely.

Businesses selling to other businesses tend to rely on automation for sharing information allowing collectors to focus more on relationships with higher quality interactions where consumer credit and collections tends to focus more on automation with more frequent customer contact. As such, technologies like auto dialers and skip tracing are much more common in B2C than in B2B. It is important to identify specific requirements and understand which features are included in each of the credit management software applications on your short list of potential solutions.

PREMISE VS. CLOUD CREDIT MANAGEMENT SOFTWARE

Deployment wasn’t an option just a few years ago as most midmarket and enterprise credit management software was installed on premise. But times are changing and most of the major applications available today are available for local installation as a traditional Windows desktop application or hosted online. Be cautious when evaluating hosted solutions to understand the hosting platform and methodology. Many legacy credit management software developers are simply hosting their old software themselves and marketing it as a cloud solution. These products were never designed to be deployed as hosted applications and some are not available in a true software as a service (SaaS) business model. Further, while premise-based solutions may seem attractive, they come with many drawbacks for burdened IT departments who must manage integrations, upgrades, installations, and local databases. Consider growth in cloud applications as part of your overall technology plan and carefully evaluate both types of solutions drawing your own conclusions in respect to deployment model.

DO YOU NEED CREDIT MANAGEMENT SOFTWARE?

There are many ways to manage accounts receivable, credit and collections and you may not necessarily need to invest in CCM software. In general, smaller businesses managing less than 100 active customers or less than 100 active invoices monthly can probably make-do with manual processes using spreadsheets, aging reports, and other common desktop productivity applications. However, this process is much more difficult when you’re trying to manage a larger customer base or higher volumes of invoices.

Keep in mind that companies that implement CCM systems typically spend 300% more time soliciting customers for payment because they utilize technology to automate communications, enable customer self-service, and provide centralized information that is organized to improve credit and collection efficiency.

ACCOUNTS RECEIVABLE SOFTWARE BUYERS GUIDE

What else is important to know when searching for credit management and accounts receivable software?
We’ve got you covered in this guide.

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