Credit Portfolio Management for Customers: Infographic

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Leverage Portfolio Management to Scale Your Resources

Say goodbye to that Excel spreadsheet. In today’s uncertain economic times, and with access to rapidly improving and innovative technology, it’s simply not enough to manage your customers’ business credit lines on an account-by-account basis. When credit professionals practice business as usual, credit risk can creep into a customer base, increasing bad debt and consuming extra resources to follow up with customers who pay slowly or not at all.

It’s time to practice credit portfolio management – take a step back and get a big-picture view of all your accounts’ performance as a whole. Also known as portfolio credit risk management, it’s the proactive, strategic practice of managing and monitoring your existing customer account base to understand the impact of your credit policy – whether you have 500 or 500,000 accounts.

When you can analyze different segments of your customers, you can better understand your exposure, such as who pays late, who’s at risk of paying late, and whether they’re all in the same industry or country, for example. This insight into your accounts lets you quickly see where the real risk is and manage those accounts more closely by prioritizing collections.

Benefits of Credit Portfolio Management:

  • Strategic use of collections resources
  • Targeted benchmarking and trends
  • Streamlined engagement with sales
  • Superior management of account reviews
  • Improved regulatory compliance and reporting
  • Better understanding of corporate family exposure
  • Visibility into new accounts sourced from partnerships, mergers, and acquisitions
  • Improved insight on risk in order to get the best rates from banks, credit insurance companies, and outsourcers

Greater Insights Help Credit Teams Manage Growing Risk

The level of insight gained through credit portfolio management helps you better understand risk patterns, providing opportunities to adjust your current credit and collections policies to better manage risk and make confident credit decisions.

3 Credit Portfolio Management Tools for Better Risk Assessments

While credit professionals need portfolio management to understand total risk better and identify growth opportunities, they also need the right tools to make that process efficient and effective.

Predictive Analytics – Identify potential future risks that you wouldn’t see by merely looking at payment trends. Prioritize the review of potential high-risk customers and customers with additional spend capacity – increasing credit limits where needed.

Alerts – Stay apprised of changes in your customer base – through an email and a notification – that may affect your level of risk and opportunity. For example, know instantly if a customer has had a credit score change, is the target of a lawsuit, has moved, was recently purchased by another company, etc.

Dashboards – Segment customers by data elements such as business size, industry, or location to develop a profile of your best customers.

Click on the link below to check out the full infographic on Portfolio Management for Credit Teams.

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