Digital credit applications aren’t just about keeping up with the overall trend toward digitization. Instead, there are several clear business benefits to making the switch from paper-based processes (which also applies to manual PDF and Word business credit application templates). Perhaps the most important benefit of using digital credit applications is improved accuracy.
Let’s face it. What good is a credit application with inaccuracies? These applications shouldn’t just be formalities. They should be the foundation for understanding a customer’s financial health so you can confidently start a business relationship and extend credit on risk-appropriate terms. But, if you can’t verify basic details like names and bank accounts, you’re probably not going to get off to a very good start.
Fortunately, digital credit application solutions can help make the entire application process more accurate, while also being more consistent and efficient, among other advantages.
In fact, trade finance digitization as a whole can help companies get the right information and improve their overall processes.
“Digitization allows corporates to achieve better control of their credit facilities, reduce fees and speed up the application process, enabling them to grow transaction volumes without the requirement for additional credit. For export letters of credit, faster document preparation and reduction of errors allows exporters to offer better pricing,” notes the Association of Corporate Treasurers (ACT).
So, how do digital credit applications specifically help improve accuracy? Let’s dive into some of the top reasons.
Digital credit applications can make it easier to verify names, as these applications tend to be managed online through platforms like Nectarine Credit, making it easier to automatically match name data with other online resources. For example, Nectarine Credit will soon start cross-checking names with what’s registered with Secretary of State offices. Automated vendor reference checks can also help ensure accuracy.
This verification includes company names, as well as the names of relevant individuals. It may sound trivial, but even details like verifying whether an applicant uses their nickname or legal name can make a difference.
That’s because if the nickname is “not a valid legal name of the representative individual signing off on the credit application, then the legal viability of that application could be called into question,” says Credit Mediators Inc.
Similar to how digital credit applications can improve name verification, they can help ensure the accuracy of bank account information. Even if you’re confident in the ability to contact a bank manually to verify everything matches up, that still slows down the process at best.
Worse, manual verification could lead to errors caused by issues like typos or mishearing something over the phone. You might not even hear back from the bank at all. Yet digital credit applications through Nectarine Credit enable online bank account verification in seconds, so you can be more confident that details won’t slip through the cracks. And, time is money, especially when you compare seconds to days -- or even weeks.
Another way that digital credit applications help improve accuracy is by providing a more consistent, repeatable process that helps cut down on mistakes like typos, writing down the wrong information or forgetting to fill in a field entirely. When done manually or via email, it’s easy to make these types of mistakes.
With digital credit applications, however, you can often more easily copy information from one field to the next, and a platform can also provide alerts about missing fields, rather than having someone skip over important data. Plus, in the event a mistake does occur or more information is needed, it’s often easier and faster to communicate online. An applicant who’s out of the office, for example, may not be available right away to fax in a corrected form, but they might be able to quickly log in to a cloud-based credit application platform and get you the right information.
Lastly, digital credit applications can help improve accuracy in the sense that they can provide secure, digital audit trails. Like electronic signatures, the records within digital application systems stand up in court. So, if you ever have a legal issue down the road with a customer, you can easily access the digital records and see important information like the amount of credit requested and their signatures on relevant documents.
But you don’t have to wait for disputes to benefit from a digital audit trail. Even if you want to make a few simple updates — it’s generally a good idea to periodically update credit applications with current customers — having a clear, digital audit trail helps you access the right information, if you need to compare changes between applications.
In addition to verifying what customers themselves say, accessing accurate vendor payment history and easily making trade reference checks can give you confidence when extending credit. “Most customers expect this question on a credit application and are ready with three, four or five references,” notes the National Association of Credit Management (NACM).
Through Nectarine Credit, credit applicants add vendor information, and the platform will then automatically email these vendors for reference checks. Doing so provides timely, accurate data such as past due balance, average time to pay and current credit terms. Qualitative comments from references can also help give context to these data points.
Being able to keep track of these references through a digital credit application platform helps companies ensure that they have the right information.
From streamlining name and bank account verification, to cutting down on instances of missing/wrong information, to providing an easily accessible audit trail, digital credit applications help businesses get the accurate information they need for financing purposes.
However, not all digital credit application platforms are the same. Nectarine Credit provides a number of advantages, such as providing an intuitive dashboard that helps you accurately track the status of your credit applications. Nectarine Credit also provides a digital audit trail backed by the highest standards of data security, using secure cryptography and enterprise-grade SSL.
See for yourself how Nectarine Credit can help you improve the accuracy of your credit applications.