Credit and A/R Integration: Leveraging A/R Data for Daily Credit Decisions

What you’ll learn


  • Learn how O2C team silos can be eliminated with an integrated platform for collaborative flow of data in real-time
  • How Credit teams can seamlessly integrate with other A/R teams to leverage cross-team data for achieving O2C excellence

Order-to-Cash Teams are Working in Silos

According to a recent survey by the Institute of Financial Management (IOFM), less than 5% of A/R functions are fully integrated. Moreover, 43 percent of teams report some “formal coordination” between the various A/R functions, while 13 percent report no coordination at all.

Order-to-cash teams have traditionally operated with such organizational silos hindering the collaboration. Still, these facts are often disregarded with the assumption that every separate function in the Order-to-Cash process has a clear objective. If every team does their job well, then everything works perfectly, which can lead to excellence. 

Sales Team: “Good news! Today, we closed a deal with Penta Corp! 

Credit Team: “That’s good news indeed! However, we’ll have to take a step back and analyze their portfolio risk because they’ve already exhausted their credit limit!”

Collections Team: “Penta Corp hasn’t been paying on-time since last September.”

Cash Application Team: “Hey, we checked! It turns out they have sent out the payment today morning, and we are yet to process it.”

Here, each team is doing their job according to their pre-defined goals, but they lack visibility into what the other teams are doing. This seems to be a simple problem, but it isn’t. Imagine a credit analyst releasing a blocked order without knowing whether the customer will be making a payment at all or not. This not only leads to a higher DSO, but the A/R teams’ accountability is at stake. 

The credit team is not an exception. The upcoming sections of this blog will explore how credit teams lack visibility into A/R data and how to ensure seamless collaboration within credit and other A/R teams.  

Credit Agency Reports vs. Inter-Team Collaboration: What’s the Priority for Credit Teams? 

Credit teams play a crucial role in balancing credit risk exposure. In their day-to-day operations, they onboard new customers, assign credit limits, review existing accounts and release blocked orders. 

For daily credit risk evaluations, credit teams mainly focus on external data like credit ratings and financial data from external agencies and bureaus such as D&B, Experian. As they manually download credit reports and credit agency scores, they end up not paying a lot of attention to the data coming from other A/R teams such as collections, cash application. 

Eliminating O2C Silos with the Power of Integrated Receivables

Today, the leading credit teams are collaborating seamlessly with cash application, collections, and deductions teams to contribute towards a cautious and profitable growth of their organizations, even in a volatile economy.

HighRadius AI-powered Integrated Receivables platform has enabled credit teams to gain visibility into collections and cash application data without any manual intervention. You can conduct proactive credit reviews and handle blocked orders with just a single click to keep your credit risk exposure in check. 

Let us understand how credit and other A/R teams can seamlessly collaborate with each other:

Real-Time Update of Credit Risk Exposure: Integration with Cash Application 

With Integrated Receivables Platform, Cash Application teams can automatically share payment information with credit teams on a real-time basis. With payment information flowing in from Cash Application Cloud, credit risk exposure is auto-updated. This enables credit teams to informed decisions based on the latest data.

Faster Receivables Conversion with Credit Intelligence: Integration with Collections

Credit teams can share credit intelligence with collectors, such as credit limit, credit scores, risk class, credit exposure, and blocked order information on a real-time basis. This way, collections analysts can prioritize the critical customers to contact. For instance, if a collector receives alerts related to the sudden degradation of a customer’s risk class, the collector would prioritize that customer over others. 

Moreover, with data from collections, credit teams can review collectible amounts to calculate adjusted credit exposure and release or block orders. Credit teams can also dynamically update credit exposure with promise-to-pay information.

How Credit Teams can Collaborate with Deductions

Integrated Receivables can enable credit teams to collaborate with deductions teams to receive dispute-related information. This way, they can dynamically update credit exposure by leveraging the payment and dispute information.

To know more about HighRadius Integrated Receivables – click here.

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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.