Is your trade credit team drowning in paper?

Digitisation in trade credit management represents a broader trend in the market, driven by the increasing need for efficiency, accuracy, and agility in day-to-day operations. In fact, a recent study* has shown that 92% of SMEs acknowledge the critical importance of digital transformation. Such a high percentage points towards a strong market trend driven by the need for streamlined processes, reduced operational costs, and significant steps away from manual processes.

Companies offering trade credit are transforming too, recognising the value of real-time data processing, enhanced risk assessment capabilities, and the ability to adapt quickly when conditions change. Additionally, end-customers are happier because processes are faster and more user-friendly. As a result, more businesses are digitising trade credit reports, not only to stay competitive, but also to be able to make more informed and efficient credit decisions.

Many global trade credit teams are still using traditional methods with the following manual steps:

The Trouble with Traditional Trade Credit Approaches

For businesses trying to manage their cash flows and ensure end-to-end visibility, traditional approaches present real challenges.

1. It’s time-consuming

The paper-based manual processes associated with credit reports can be time-consuming, keeping analysts from other important growth-focused functions like identifying opportunities and risks.

2. Data sources are limited

Traditional trade finance processes rely on credit bureau data, which may not be completely up-to-date or capture the complete financial picture of an applicant.

3. Subjectivity in decision-making

Decision-making is impacted by the data available and can be influenced by human bias or limited by the credit team’s experience and expertise.

4. Inflexibility

Responding to market changes or updating credit policies can be slow, impacting business agility and the ability to manage nuanced scenarios.

5. Higher operational costs

Manual processes require significant manpower and resources.

Why Leading Businesses are Digitising

Business leaders who are choosing control and visibility of the end-to-end process are experiencing some real benefits.

1. Unlock real efficiencies

Online applications and automated processes streamline the workflow, significantly reducing the time to process credit applications. See the case study below.

2. Richer data leads to deeper insights

Digital platforms can integrate diverse, real-time data sources, including data from internal sources (e.g. aging receivables), external sources (e.g. credit reports, financials, judgements, registrars, bank statements, trade payment data) and other sources (e.g. credit applications, references).

3. Better decision-making

Other than the richness of real-time data, advanced algorithms and machine learning can minimise human bias, making credit decisions more consistent and reliable.

4. Growth-focus

The reduction of time spent on applications and the availability of richer data allow analysts to focus on identifying opportunities and risks, thereby growing the business. Leading trade finance platforms surface these accounts based on continuous account monitoring, helping analysts to make growth-focused decisions.

5. Business-specific scalability & flexibility

Digital solutions can easily adapt to changes in credit policies or market conditions and can handle a larger volume of applications without a proportional increase in resources.

6. Less paper, reduced costs

Automation reduces the need for extensive manpower and paper-based processes, leading to cost savings. There’s no longer a need for cabinets of customer files. Every account and their full history are available digitally.

7. Better customer experiences

Faster credit decisions and a streamlined application process improve the customer experience, potentially increasing business opportunities.

8. Transformation

Digital trade credit management supports your company’s digital transformation efforts.

Many trade credit teams are still drowning in paper and working inefficiently. Whether it’s applications, bureau reports, or supplementary documentation for decision-making, it can all be a lot! Finance professionals who have growth targets linked to some of the above areas are choosing digitisation that ensures control, visibility and efficiency.

Trade Shield is a leader in digital trade credit management, always-on account monitoring and payment behaviour forecasting. Trade Shield has extensive experience in helping credit teams across industries, and at multinational brands like DHL, Heineken, Bridgestone, Avis, and NTT. Clients have enjoyed reductions in approval times and increases in sales and purchase volumes.

Take the next step

The journey from paper-based systems to a dynamic digital platform is transformative, easily highlighting the inefficiencies of manual processes and the compelling advantages of digitisation. If you’re a finance or credit professional with growth targets in any of the above benefit areas, we’d love to chat about how to streamline your operations and propel your business towards a more agile and data-driven future.

Book a no-obligation demo here, or contact us here. One of our friendly credit experts will be in touch.