{"id":30926,"date":"2025-06-03T08:44:54","date_gmt":"2025-06-03T12:44:54","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=30926"},"modified":"2025-06-03T08:44:56","modified_gmt":"2025-06-03T12:44:56","slug":"credit-and-collections-management","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/credit-and-collections-management\/","title":{"rendered":"What is credit and collections management?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is credit and collections management?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2025-06-03T08:44:54-04:00\">June 3, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is credit and collections management?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/credit-and-collections-management\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re still relying on manual accounting processes, it\u2019s likely costing you both time and efficiency. Many accounting teams still use outdated tools like email and spreadsheets to manage outstanding invoices and cash flow. While IT, sales, and HR departments have adopted automation, many finance teams still use software from decades ago.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a typical workflow, invoices are sent as PDFs, updated in spreadsheets, and passed back and forth by email. This process leads to scattered, static information that\u2019s difficult to track and update in real time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There\u2019s a better way to <a href=\"https:\/\/www.sage.com\/en-us\/blog\/accounts-receivable-management\/\">manage accounts receivable (AR)<\/a>. Credit and Collections Management (CCM) is an integrated tool designed to simplify your AR processes. It works alongside your existing accounting system to support credit management, billing, invoicing, payment processing, dispute resolution, and collections. In short, it helps you stay on top of your receivables while giving you better reporting and insights.<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-importance-of-credit-and-collections-management-system-functionality\" data-level=\"2\">Importance of credit and collections management system functionality<\/a><ul><li><a href=\"#h-1-credit-facilitation\" data-level=\"3\">1. Credit facilitation<\/a><\/li><li><a href=\"#h-2-billing-and-invoicing\" data-level=\"3\">2. Billing and invoicing<\/a><\/li><li><a href=\"#h-3-remittance-processing\" data-level=\"3\">3. Remittance processing<\/a><\/li><li><a href=\"#h-4-collections-management\" data-level=\"3\">4. Collections management<\/a><\/li><li><a href=\"#h-5-dispute-management\" data-level=\"3\">5. Dispute management<\/a><\/li><li><a href=\"#h-6-reporting-and-analysis\" data-level=\"3\">6. Reporting and analysis<\/a><\/li><\/ul><\/li><li><a href=\"#h-why-credit-and-collections-management-is-essential\" data-level=\"2\">Why credit and collections management is essential<\/a><\/li><li><a href=\"#h-the-benefits-of-ccm-solutions\" data-level=\"2\">The benefits of CCM solutions<\/a><\/li><li><a href=\"#h-streamline-ar-with-automation\" data-level=\"2\">Streamline AR with automation<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-importance-of-credit-and-collections-management-system-functionality\"><strong>Importance of credit and collections management system functionality<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Not all CCM solutions are created equal, but most of them support six key areas:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-credit-facilitation\"><strong>1. Credit facilitation<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Manage credit scoring, credit application reviews, financial analysis, and credit limits easily. CCM tools help you assess risk, monitor your AR portfolio, and make informed decisions about new accounts and orders.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-billing-and-invoicing\"><strong>2. Billing and invoicing<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Avoid errors and speed up invoice generation and delivery. CCM systems support vendor compliance, contract management, and Electronic Invoice Presentment and Payment (EIPP\/EBPP).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-remittance-processing\"><strong>3. Remittance processing<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Simplify payments with financial EDI, EFT, and automated cash application tools. You can match payments to invoices faster and gain visibility into cash forecasting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-collections-management\"><strong>4. Collections management<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Automate collection workflows, prioritize tasks and keep track of every customer interaction. Features include reminder systems, activity logs, communication tools, and payment plan calculators.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-dispute-management\"><strong>5. Dispute management<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Handle deductions, chargebacks, and disputes efficiently with built-in collaboration tools, document sharing, and root cause analysis features.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-6-reporting-and-analysis\"><strong>6. Reporting and analysis<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Access dashboards, email alerts, pre-built reports, and forecasting tools to stay on top of your AR performance and make data-driven decisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-credit-and-collections-management-is-essential\"><strong>Why credit and collections management is essential<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">According to <a href=\"https:\/\/www.cfosimplified.com\/accounts-receivable\/protecting-your-most-valuable-asset\/\">Suzanne Sabharwa<\/a>, accounts receivable are often a business\u2019s most valuable asset. Most ERP and accounting platforms include AR modules, but many fail to manage collections and disputes effectively.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s where CCM comes in.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Across industries, companies face challenges in collecting payments on time. In fact:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>17% of business customers don\u2019t follow supplier credit terms.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.cfosimplified.com\/accounts-receivable\/protecting-your-most-valuable-asset\/\">61% of companies<\/a> experience delayed or denied payments due to admin issues like incorrect invoices or late delivery.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Industries hit hardest by uncollectable receivables include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Manufacturing.<\/li>\n\n\n\n<li>Specialty trade contractors.<\/li>\n\n\n\n<li>Business services.<\/li>\n\n\n\n<li>Engineering services.<\/li>\n\n\n\n<li>Wholesale distribution.<br><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Companies can boost efficiency and reduce costly errors by automating AR workflows and formalizing collections processes. In fact, senior finance leaders say their top reasons for automation are better control over cash and fewer processing mistakes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-benefits-of-ccm-solutions\"><strong>The benefits of CCM solutions<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">With a CCM application, your business can:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lower transaction costs.<\/li>\n\n\n\n<li>Improve cash flow and forecasting.<\/li>\n\n\n\n<li>Boost team productivity.<\/li>\n\n\n\n<li>Reduce bad debt and write-offs.<br><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">And the results speak for themselves. Companies that automate collections alone see:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>20%+ reduction in days sales outstanding (DSO).<\/li>\n\n\n\n<li>25%+ reduction in past due receivables.<\/li>\n\n\n\n<li>15%+ decrease in bad debt reserves.<\/li>\n<\/ul>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Managing modern finance in a time of unprecedented change<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p class=\"\">Discover how taking the right steps to modernise accounting management systems will help your business gain insights that will lead to improved productivity and reduced costs, and prepare you for rapid growth.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-us\/cp\/managing-modern-finance\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-18954\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>Download your free guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1181404518-1440x810.jpg\" class=\"single-cta__image\" alt=\"People submitting phones\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1181404518-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-streamline-ar-with-automation\"><strong>Streamline AR with automation<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Sage helps leading finance teams work smarter by automating key processes and eliminating cash flow leaks caused by manual workflows. Our solutions keep your books aligned across B2B partnerships and make managing collections easier and more efficient.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whether you\u2019re a small business or a large enterprise, Sage\u2019s powerful accounting and AR automation tools can help you take control of your receivables.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Get started with Sage today!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">See how our <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/accounts-receivable\/\">accounts receivable automation software<\/a> can strengthen your payment strategy and reduce your DSO by up to 30%.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div 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streamline it with digital tools\u2014is key to making your workflow faster and easier.<\/p>\n","protected":false},"author":1774,"featured_media":9118,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_is_cornerstone":"","_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_opengraph-image":"","_yoast_wpseo_opengraph-image-id":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_yoast_wpseo_twitter-image":"","_yoast_wpseo_twitter-image-id":"","_yoast_wpseo_schema_page_type":"","_yoast_wpseo_schema_article_type":"","_sage_video":false,"_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_primary_category":"","sage_membership_post_content_type":"article","sage_membership_post_featured_video_id":"","sage_membership_post_video_type":"trailer","sage_membership_post_featured_video_duration":"","post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[43],"tags":[],"business_type":[312,41],"lilypad":[],"context":[],"industry":[57],"persona":[97],"imagine_tag":[],"coauthors":[509],"class_list":["post-30926","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","business_type-accountants","business_type-growing-business","industry-financial-services"],"sage_meta":{"region":"en-us","author_name":"Yassir 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