Current 30 days and supplier credit management
ERP (Enterprise Resource Planning) systems, such as SAP, Oracle, Priority, and Tafanit, improve business processes, streamline activities, and ensure the flow of information between departments. Poor credit days management (current plus) creates serious financial risks, such as processing invoices too early, paying early, and miscalculations. These problems hurt cash flow, increase costs, and damage supplier relationships.
The main dangers of poor credit management
Errors in invoice payments – from 30-day to immediate
ERP systems such as SAP, Oracle, Priority, and Tafanit allow for rapid invoice processing, but without proper controls, they can lead to early payment (from current to immediate) of invoices before full confirmation of orders or product quality inspection. For example, a retail company may pay an invoice without verifying that the products received were of the required quality.
- Pressure on cash flow: Early payments reduce financial liquidity.
- Payment Disputes: It is difficult to dispute a payment made too early.
- Double payments and overpayments: These errors increase the company’s costs and make it difficult to reconcile accounts.
Early payment processing
Payment automation in ERP systems improves efficiency, but it can also create damage if payments are made earlier than expected. For example, a company may shorten a supplier’s credit terms due to an undocumented manual change, leading to unnecessary interest costs.
- Loss of financial flexibility: Early payments reduce financial availability.
- Harm in negotiations with suppliers: Early payments reduce bargaining power in cases of disputes.
- Loss of interest earnings: Deferring payments may yield interest earnings.
Errors in calculating credit days
Errors in defining credit terms may result in delays or premature payments.
- Late Payment Penalties: Providers impose fees for late payments.
- Damage to supplier relationships: Late payments damage trust and preferred customers.
- Inaccuracies in financial reporting: These errors harm financial forecasts and transparency with shareholders.
Detelix solutions for business protection
Detelix provides solutions for identifying and handling irregular activities in an organization. The system identifies and alerts about advances or delays in payments in real time. It helps managers make the right decisions quickly.
- Real-time anomaly detection: Advanced monitoring that alerts you to credit day exceptions. The system examines the credit days actually paid against the required credit days.
For example: In order to be more favorable to the supplier, the accounting manager changed the credit days on the invoice, and instead of paying the supplier a 30-day grace period, the supplier received immediate payment. - Seamless integration: The system integrates with SAP, Oracle, Priority and Tafanit.
- Accurate data analysis: tools to identify double payments, ghost suppliers, and calculation errors.
Using Detelix, companies improve management processes, prevent errors, embezzlement, and ensure stable and reliable cash flow.