Powering Accounts Receivable Credit APproval With Order To Cash Solutions


In todays competitive business environment, efficient and reliable Accounts Receivable credit approval is crucial aspect to adequately managing the Order to Cash flow. Setting up fast and secure credit approval process provides foundations for successful relationship building with customers and ensures that key stakeholders are kept updated on the latest information. The Order to Cash system can assist in this regard by streamlining various transactions, guaranteeing higher levels of security, and enabling stakeholders to make educated decisions quicker than ever before.

Establishing System of Credit Approval

A cornerstone of any successful Order to Cash system is secure and efficient accounts receivable credit approval system. An effective OTC solution should integrate comprehensive credit assessment process that includes the essential steps of Risk Evaluation, Underwriting, and Decision Monitoring.

Risk Evaluation: The first stage of the credit approval process is Risk Evaluation. Here, the OTC solution’s Risk Assessment module is used to thoroughly evaluate information provided by the customer, such as their credit history, publicly available financials, and any potential litigation/collections risk. All of this information is then used to formulate risk percentage for the individual customer which can be used to assign credit limits and terms for each trading partner.

Underwriting: After the risk assessment is complete, the next step is Underwriting. This involves the use of the system’s automated Credit Assistant module to review all applicable documents such as bank references, account applications, and credit iscores. The Credit Assistant will then make an automated decision regarding the creditworthiness of the customer and decide whether or not credit line should be extended.

Decision Monitoring: The third and final stage of the Accounts Receivable credit approval process is Decision Monitoring. This is where the OTC system’s ongoing monitoring service is utilized to track the conduct of customers over time and detect any changes in their financial situation.

Advantages and Benefits of an OTC Solution

By utilizing an Order to Cash solution with built-in credit approval processes, finance executives can enjoy wide range of advantages and benefits. First and foremost, the automated nature of the system eliminates the need for manual credit evaluations, thus saving time, reducing errors, and ensuring that all risks are accurately identified and mitigated. Furthermore, the integrated credit monitoring module allows all stakeholders to monitor customer activity at any time and from any location, providing comprehensive picture of the customer’s transactional behaviour.

Moreover, the automated nature of the system also ensures that individual customer’s credit limits are effectively managed, reducing exposure to risk, and facilitating better financial decision-making. This can prevent businesses from over-extending credit lines to customers, thus avoiding costly delays and disputes. Finally, the OTC system also provides stakeholders with access to historical data and analytics which can be used to make more informed decisions about future trading partners.

In conclusion, integrating Accounts Receivable credit approval processes into an Order to Cash solution can be major boon for finance executives looking to streamline the accounts receivables process. With automated Risk Evaluation, Underwriting, and Decision Monitoring processes in place, companies can be sure of secure and effective credit approval system that minimizes risk, provides timely information, and facilitates better decision-making.