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Energize Your Portfolio Management

What you’ll learn

  • Understand how comprehensive analysis helps Credit and Accounts.
  • Discover the areas where Portfolio Management can bring huge benefits.
  • Learn how to extend additional Credit to get large Profit margins.
  • Comprehend how Credit can establish norms and consistency.


The heart of portfolio management is analysis. Through analysis, Credit can establish norms and consistent risk classifications that then provide a broader framework for quantifying credit and collection decisions. The result is a better justification for decisions and more consistency across the entire receivables portfolio. In the manual collections world, collectors often base decisions on their own experience and intuition due to the fast-paced nature of the environment. Some collection pros can operate at a fairly high level based on historical activities and a certain measure of precedence when dealing with individual accounts. This does not mean they are always on target when it comes to broader portfolio management. It also leads towards a bias for conservative decisions and limited risk which then leads to missed opportunities and lost dollars for the bottom line. By utilizing comprehensive portfolio management analysis, credit executives can get a much greater grasp of their accounts. Perhaps certain accounts don’t fail as often as expected and maybe overall risk levels are low, so large profit margins may justify extending additional credit to increase sales. With analysis, you minimize a certain amount of risk as well as gain a number of benefits. Three areas where portfolio management can bring huge benefits are as follows:

1. Identifying underperforming accounts

This should be obvious – it is easier to pick out the bad apples and therefore it is more likely that future results will blossom. To take things a few steps further, collectors need to compare portfolio segments and individual customers within the portfolio so trends and commonalities can be identified. This only makes the underperformers even easier because it takes the randomness out of the identification process. Industry trends, inventory management, and seasonal attributes become more obvious when it concerns an entire segment of your portfolio and allows for commonality in addressing the broader needs of this group.

2. Better defining your credit and collection management needs

After looking outward and identifying your underperformers, turn inward to address your credit management needs. Try to answer “why?” as often as possible – Why is this sales territory slower in collections than others? Why are pricing deductions increasing in a particular AR segment? By answering these questions you can create structural improvements and amend your internal practices to positively affect collections.

3. Learning the difference between desirable and undesirable accounts

Portfolio analysis can reveal valuable information about customers. When you identify a market segment or type of customer that can handle a higher credit line you can increase your market share with established customers. By giving your sales department information concerning your top and bottom accounts they can target their efforts towards prospects with the lowest potential risk and best potential for long-term customer relationships and profits. The key is being able to create a rank ordering of your accounts based on risk or any other relevant factor. Managing your accounts receivable portfolio is crucial to being competitive with best-in-class organizations. Part of that competitive edge is utilizing all the analysis and reporting tools that come with accounts receivable software systems. The different “drill-down” options allow for nearly unlimited ways of viewing your accounts. These varying perspectives make trend spotting incredibly more efficient and beneficial to both short- and long-term financial planning.
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HighRadius Credit Software automates the credit management process, enabling credit managers to make highly-accurate credit decisions 2X faster and enable faster customer onboarding with 4 primary components: configurable online credit application, customizable credit scoring engines, credit agency data aggregation engine, and collaborative credit management workflow. Along with that, there are a lot of key features that should definitely be explored some of which are online credit application, credit information aggregation, automated credit scoring & risk assessment, credit management workflows, approval workflows, and automated bank & trade reference checks. The result is faster customer onboarding, better internal collaboration, higher customer satisfaction, more targeted periodic reviews, and lower credit risk across the company’s customer portfolio.