A recent online filing of an SAP patent for credit management shows how this process could be further automated. Patent number 8615464 was published online last month in the US by SAP, which provides the sales processing engine for most of the large distribution companies.
It says that while outside services like Dunn & Bradstreet may also help to some extent at determining the risk by offering outside credit scoring, such services do not completely address the problem, as each company has its own view of a risk/benefit analysis. Automating the credit decision can help companies and other entities speed up the credit process and improve the consistency and efficiency of a credit operation. However, such an automated process must be flexible enough to meet the demands of different businesses.
Automated credit management systems may include a credit information manager, a credit limit manager, credit decision support and a credit rules engine. The clear objective of the SAP system is to offer a speedy response and online decision-making.
“Embodiments of the present invention enable controlling of credit risk via real-time credit allocation and ongoing monitoring. They may permit online credit rating check for a fast credit decision. Further, the may reduce effective DSO by reducing payment delays and bad debt. Additionally, they can increase revenues with risk free accounts by decreasing the rate of credit refusals. They may also reduce transaction costs by automating the credit application process. Moreover, they may improve customer relationships by concentrating the service on profitable customers. Embodiments of the invention may also link dunning and dispute information to the credit decision process,” it says.
The SAP process will automatically set a customer credit limit based upon information relating to the customer through the application of a rule, update credit scoring, monitor credit limits and exposure.