S&P Global, Atradius, and Euler Hermes are all forecasting a higher rate of business bankruptcy filings. This is attributed to phase-out of Government stimulus, support, lending, loan forbearance, as well as the start of interest rate increases. Moreover, with the increasing failure rate of new businesses, the level of Credit Risk with resulting bad debt and delinquency losses has increased.
Download this eBook to understand how to:
- Minimize credit risk exposure
- Increase revenue by selling in a closely monitored manner
- Automate 70-80% of the manual work in credit processing
- Improve productivity and gross profit margins with a customer success story
A glimpse into this eBook
- Atradius forecasts a 33% increase in business bankruptcies, and Euler Hermes a 15% increase.
- As the pandemic stimulus & debt/mortgage repayment forbearance fades, credit risk will increase over 2021.
- Business startups increased to an all time high (> 5 million) during the pandemic. However, per the US Bureau of Labor Statistics, 30% will fail within two years.
- Your credit ratings are less reliable given the magnitude and speed of change of companies’ finances.
How will you generate adequate revenue, and avoid severe cash shortages and catastrophic bad debt?
- Update the Credit Assessments and Credit Limits of your large & medium size customers ASAP. Update them more frequently
- Ensure your Credit-triggered order-hold is operating at peak speed & effectiveness
- Accommodate multiple modes of payment to make it easy for your customers to pay you
- Establish robust Work from Home capabilities. This will increase employee retention
- Automate the end-to-end Credit Vetting and Control process
- Customize Credit Applications that customers can complete & submit online
- Automate real-time import of Credit Bureau information and payment history
- Leverage AI to make decisions based on pre-defined rules to assign credit limits
Client Challenge
The client (Cali Bamboo) is a fast-growing supplier of building materials selling to a customer base highly dependent on vendor financing. While they sought to provide this financing quickly while managing credit risk, their manual systems could not keep pace with growth. They needed a B2B digital credit solution to evaluate more customers quickly and increase their revenue.
Customer Value
Deployed Emagia Digital Credit Automation Solution (thecreditapplication.com) with Digital Assistant
- Digital Credit Application with digital signatures, digital trade and bank reference checks
- Integrated with Experian & NetSuite analytical tool; automatic credit limit decisions enabled.
- Automated resale certificate verification process
- Automated > 80% of Credit Vetting process
- Now processing increased volume of credit applications in 4 vs 14 days
- Scalable foundation for digital ecommerce growth
- Fast turnaround of Credit Applications
- Increased Productivity
- Maximization of Revenue with Controlled Credit Risk
- Straight thru Processing of E-commerce orders
Faster onboarding of New Customers
-
Improved Customer Experience/Satisfaction -
Controlled Credit Risk -
Greater Cash Flow -
Increased Revenue & Profit
- To control credit risk and bad debt loss
- To minimize severe AR delinquency & cash flow deficiencies
- To promote revenue in accord with the company’s tolerance for Credit Risk
- To identify key vendors who may not survive
- To onboard new customers swiftly to pre-empt competitors from becoming their primary (or secondary) supplier.
Time-Saving
- Securing Complete Credit Application: Eliminates back & forth communication with customer for missing info
- Automated Gathering of information: Digital Assistant obtains bank & trade references, Credit Bureau info, etc.
- Automated Verifying of information: Digital Assistant verifies business license, sales & use tax, OFAC legal address, etc.
- Automated Scoring with recommended Credit Limit
Labor Saving
70 – 80% reduction in manual effort in above tasks
Problem Overview
American Heart Association (AHA) launched eCommerce site ShopCPR to sell CPR equipment and classes online. Credit Processing cycle time was over 2 weeks. They needed a B2B digital credit solution to accept more customers and do more business.
Customer Value
- Deployed Emagia Digital Credit Solution
- Digital signatures, digital trade and business reference checks
- Integrated with Experian, AHA custom score-card, automatic credit limit decisions enabled.
- AHA reduced B2B credit approval process from 2 weeks to 24 to 48 Hrs
- Now processing over 200 -300 credit applications per month
- Scalable foundation for digital ecommerce growth
