The Evolution of Credit Management: New Challenges Demand Modern Solutions

In an era of increasing complexity and risk, credit departments face mounting pressures to evaluate customers and manage collections effectively. A recent comprehensive survey conducted by NetNow and the National Association of Credit Management (NACM) reveals critical insights into the challenges, priorities, and technological needs of today's credit professionals.

Industry Challenges: A Perfect Storm

The credit landscape has become significantly more challenging in recent years. According to our findings, 48% of credit professionals report longer collection times from customers, while 39% note increased difficulty in evaluating new customers for credit. Perhaps most concerning, 32% of respondents have observed higher rates of fraud than usual, creating a perfect storm of challenges for credit departments.

These findings paint a clear picture: traditional approaches to credit management may no longer be sufficient in today's rapidly evolving business environment.

Current State of Credit Operations

The survey revealed that an overwhelming 74% of credit teams spend most of their time on accounts receivable and collections, with credit applications and approvals consuming much of the remaining bandwidth. This time allocation reflects the growing complexity of credit operations, particularly given that 43% of departments require 3-4 days to process new credit applications, with some taking considerably longer.

Adding to these operational challenges, credit teams are often understaffed, with 44% of departments operating with just 1-2 people. This combination of increased complexity and limited resources creates a compelling case for technological solutions that can automate routine tasks and enhance decision-making capabilities.

The Technology Imperative

Despite the clear need for modern solutions, implementing new technology remains a challenge. Our survey found that 38% of departments require more than four months to get new software approved and purchased. However, there's a silver lining: 46% of credit professionals identify implementing new technologies to streamline credit and collections processes as their top priority for the next 1-2 years.

What excites credit professionals most about new technology?

- 45% value ongoing monitoring of accounts

- 41% appreciate digital credit applications

- 40% see the potential for improved customer experience

- 39% are interested in automated trade references

Building the Business Case

For credit managers looking to champion technological adoption, understanding the decision-making landscape is crucial. The survey reveals that Credit Managers/Directors (27%) and CFOs (23%) are the primary decision-makers for new technology purchases. When presenting the case for new technology to these stakeholders, focus on these key benefits:

- Operational efficiency improvements

- Risk reduction capabilities

- Long-term cost savings

- Talent attraction and retention

Bridging the Gap: What Credit Professionals Need

Credit professionals are clear about what they need from technology vendors to make informed decisions:

- 54% want free resources, materials, and training on new technologies

- 49% seek better understanding of their challenges and processes

- 47% need more information about ROI from adoption

- 37% request more interactive product demos

Moving Forward

As the credit landscape continues to evolve, staying competitive requires embracing modern solutions that can handle today's challenges while preparing for tomorrow's uncertainties. The right technology partner should not only provide powerful tools but also demonstrate a deep understanding of credit professionals' needs and challenges.

For credit managers looking to modernize their operations, platforms like NetNow offer comprehensive solutions that address key pain points: automated trade references, instant credit and banking data access, and continuous risk monitoring. These tools can help reduce credit application processing time by up to 80% while maintaining robust risk management practices.

Ready to explore how modern credit management technology can transform your operations? Contact NetNow for a no-obligation, one-month trial and see firsthand how the right tools can streamline your credit processes while enhancing risk management capabilities.