KPI Feature Spotlight: Customers Over Credit

Manage risk, improve relationships and drive profitable decisions – all with the data in your system

Every ERP system worth its salt will contain a lot of information about what’s happening in your business. UT400, our cloud-based ERP system for merchants, makes it easy to access that information, and customised dashboards keep it entirely relevant to each user.

But having the information is only step one. Knowing what it means, and how to apply it to drive growth, profitability, service levels and business relationships is where the real value is.

Unlock the power of data to drive better decisions

Understanding exactly what is happening in your business is crucial for growth. UT400 makes it easy to see the day-to-day metrics that are relevant to your role, showing you the opportunities, risks and challenges you need to focus on. It also makes it very straightforward to dig beneath the surface and uncover the related data that helps drive decision-making.

With over 110 KPIs built into every system, UT400 offers an enormous amount of information at your fingertips. We are here to help you use that information to drive enhanced efficiency, productivity and profitability to make sure you get the very best value from your ERP system.

Customers Over Credit Limit

At first glance this is a fairly self-explanatory metric; as it sounds, this particular KPI shows you how many customers are over their credit limit at any one time.

Simply click on the tile to see which customers this relates to, and then click line by line to see the detail of each customer’s trading and credit history. Simple.

Apply and use data to make improvements

So how do you use that information in your business? Well that’s where it gets more interesting.

If you regularly have a lot of customers over their credit limit, then that might prompt a few questions:

- Are your credit limits set at the right levels?

- How did they go over their credit limit in the first place?

- Why are they over their limit – while if might be just an administrative delay, it could be a conscious decision not to pay, or it could be a credit issue meaning they actually can’t

- Is this common practice for this particular customer? The frequency of credit issues could help guide the tone and format of your follow up.

- Are customers being put on stop until credit is settled; and if so, what is the impact on trading?

- What is it costing your business to be supporting this level of financial risk?

- Does this have an impact on your own cashflow or credit rating?

- Does the customer’s value to your business outweigh the costs of delayed payment?

- What processes do you have in place to prompt earlier payment?

As you can see from the KPI tiles, you can also see which customers are near their credit limits, making it simple to set up processes in response; an automated email reminder that payment is due, for example, or perhaps a call to check up on the status for particularly key customers.

Managing credit risk simply and effectively

UT400 also helps you to implement the learnings from the data it provides. So, for example, you can set (and adjust) automatic credit controls, or set them manually.

A warning will remind users to check, or get approval, before accepting client orders which would take them over their credit limit.

Automatic credit controls can be set up based on different criteria, or can be manually adjusted to set depending on each individual customer’s situation. The freedom is entirely yours, but the system provides the tools to keep credit controls in check and manage risk accordingly.

Having the limits in place also prompts necessary actions like chasing unpaid invoices or more personal communication, all of which can help to improve customers relationships and avoid incurring unnecessary financial risk or damaging your own credit ratings.

Judgement is personal, but information validates decisions

What action you choose to take is always your decision, but your system should be there as a tool to help you. It should provide the information you need, but also give you the functions to improve processes in the future.

For example, because you can see the trading history of a customer quickly and easily,

including their average order value, frequency and overall lifetime value, you can very quickly make a judgement call on how to follow up a credit issue; you might see that they always pay late, but they do always pay, and that might be fine if they’re a value customer. However, it could be that they order small amounts from you very infrequently, and you’re actually spending more on internal resource than they are worth.

Ultimately the decisions are always yours to make, but you have the validation and context of factual data, easily accessed, to help back up that decision. You might implement an automatic reminder prompt to pre-empt slow payments, or increase the up front deposit, or even choose to do nothing. That’s up to you – but with UT400, you have the right tools to hand to make those decisions consciously and deliberately.