Automation software is turning financial operations into a competitive advantage. And the benefits for 3PL and freight forwarder back offices are striking. 

A financial ops automation solution empowers your team to:

  • Receive and send digital payments
  • Connect payment data into your TMS and accounting systems 
  • Consolidate invoices, bills of lading, remittances, and other financial documents into one location for simplified dispute resolution 

But where do you start? Each option above will achieve ROI rapidly, and implementation won’t require extensive (or expensive) integrations. Yet shipping intermediaries considering financial automation often overlook one of the key drivers of cash flow: credit tracking.

Overextended credit is a frequent culprit in cash crunches and accumulating bad debt. Automation tools offer a way to systemize every aspect of credit without adding more work to your Finance team. 

Start by including these essential elements in your credit policy. 

Before you begin credit tracking and automation, revisit your credit policy. 

Clear guidelines for creditworthiness are non-negotiable. Whether you move forward with a financial ops automation system or not, your Finance team, your customers, and Sales need to understand the policy.

If you haven’t yet written a customer credit policy, or it’s in need of extensive revision, consider factors such as:

  • How do payment histories and other elements revealed in the credit check affect creditworthiness? 
  • When will you extend more credit? How will Sales be involved with those customer decisions and discussions?
  • What happens when the customer isn’t proactive as they approach their credit limit?
  • How does your business, and the economy at large, affect creditworthiness and your appetite for risk? For example:
  • Are you willing to extend credit limits and late payments during boom times to attract new business? 
  • Will you require pre-payment during downturns? 
  • As the top line rebounds, will you allow overextension for 30, 60, or even 90 days for top-tier clients? 
  • Do current and new customers understand what conditions might precipitate a change in creditworthiness?

Winning Sales’ support and buy-in is crucial as you focus on credit. Katie Keich, CEO of Full Advantage, is an expert in helping businesses increase sales while reducing credit losses. 

She frequently reminds Sales that “all business is not good business.” Show Sales that credit tracking and automation will reveal if any of their accounts are problematic, and where better potential exists. 

Set up automations to monitor and enforce your credit policy. 

With Sales and shippers aware of your plans, and an updated credit policy finalized, you’re ready for the first step of credit automation: enforcing your credit policy. 

This is a natural starting point for your financial ops automation system. You’ll want to set up your credit automation solution to:

  • Track each customer’s credit use in real-time without any manual entry or data mining.
  • Set alerts to notify your team automatically when a customer hits a certain credit threshold — for example, a shipper using 85% of their allotted credit with no payments to date. 
  • At a system or customer-type level, adjust credit policy rules based on your changing risk appetite. 

With these real-time insights, you can prevent poor credit practices from hampering your cash flow. 

An illustration showing the four key areas your credit policy must address: how payment histories factor into credit worthiness; when and how you’ll extend more credit; how to handle overextended customers; how the economy affects your appetite for risk.

With tracking, notifications to your team (and perhaps Sales), and adjustments for your risk appetite systemized, fire drills and computing priorities will no longer interfere with monitoring credit. 

Move from reviewing automated reports to acting on predictive customer analytics. 

Committing to automated credit tracking will provide data that you can turn into valuable insights via predictive analytics. For example, once your credit automation system has processed enough data, it can send your team notifications when it detects a customer falling into a concerning pattern.

Predictive financial operations analytics can include clients on the verge of:

  • Overextended credit
  • Payments averaging more than 60 days overdue
  • Recurring, inaccurate disputes
  • Any other payments KPIs your organization relies on

You can guide predictive analytics by configuring your financial automation system to know which customer and vendor behaviors you want to avoid. In turn, the system will identify additional credit risks that may affect cash flow. 

With these insights, you can clearly show Sales which accounts may need tough conversations to achieve good standing … and which customers they should replace as soon as possible. You’ll also have full, digital records of communications and payment dates to determine if placing a delinquent customer on hold is the best course of action. 


Automate your credit tracking today.

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