As an entrepreneur, you want to have as much control as possible under your own management. From all bank transactions to the purchase as well as the sale. Or when you offer a service, you also want to ensure that everything runs smoothly.
But what if there is software that can help your company, for example in handling debtors or other important matters. In this blog we are going to talk about this software.
What is credit management and what does it do exactly? Debtor management is also called debtor administration, because it is a debtor management software that processes all debtors. This software keeps track of which debtors have paid, but also which debtors still have to pay. When a debtor has not yet made the payment, the debtor software ensures that the debtor is reminded of the payment that still has to be paid. For example, the invoice is initially sent by this software.
If payment is not made within the desired time, the system will send a reminder invoice after 2 days after the due date of the invoice. If this is also not paid, there will be another reminder for the invoice after 18 days after the due date. The last reminder is after 34 days from the expiration date. If this is also not paid after 50 days after the due date, a collection procedure will be started. As an entrepreneur you are of course entitled to the money that the debtor owes you.
In addition to the debtor software, there is also invoice financing software. The purpose of invoice financing software is to help the business grow. This software is intended for when you have to pay the supplier before the customer pays you. With the help of this financing, you are not dependent on the payment of the customer. You can pay the supplier without any worries, and this financing is straightened out again the moment the customer has paid. This way you don’t have to worry about paying off this financing yourself, as it is all taken care of automatically.
The advantage of this is that you will not unexpectedly end up in high debt. This system ensures that the financing is always repaid as quickly as possible. It is of course of no use to you if you cannot repay the financing, because you have no insight into the costs of this financing.
The use of factoring software is a relatively new way to ensure that invoices are paid on time. Despite the fact that this form of credit management is fairly new, this form of credit management is already used quite a lot by entrepreneurs.
When factoring software is used, a piece of uncertainty in the financing is removed. An outgoing invoice is entered into the factoring software system. The system then ensures that the invoice amount is in your bank account within one or two working days. In this case, it does not matter when the customer pays, after all, you have already received your money. Although this sounds very attractive, there are of course also some disadvantages of factoring. For example, the party that provides you with the software must have insight into all cash flows of your company.
Factoring also costs money. After all, you hand in a percentage on every invoice to the company that provides you with the software. Fortunately, you can easily tackle this second problem by increasing your invoices by a percentage. Most customers will not mind this and in this way, you build extra security into the financial flows of your company.