The trends of today are shaping the trends of tomorrow. How has 2024 unfolded and what is expected for 2025? As this year has come to an end, we gathered a list of the top trends in credit management through the past year:
Trends in credit management #1: Increasing DSO in European companies
A high Days Sales Outstanding (DSO) means that it takes longer for a company to collect money from its customers after making a sale, significantly affecting its cash flow and, consequently, its smooth operation. Indeed, one in four bankruptcies occur due to late payments of invoices, according to EU data.
According to the latest Allianz data, 2024 is already going in the books as a record year for insolvencies, with Western Europe leading the rebound in the number of cases. An earlier study by Allianz unveiled an increase in global DSO by +3 days in 2023 and predicted longer payment terms amid squeezing profitability in 2024.
Similar Onguard research specifically for the Dutch finance sector showed that almost half of organisations in the Netherlands had to wait more than 30 days for their invoices to be paid. Amid continuous economic and geopolitical uncertainty, forecasts for 2025 continue to underscore DSO as a top priority for organisations that wish to maintain financial resilience.
Trends in credit management #2: The credit manager shortage remains
A combination of an ageing workforce and the perception of credit management as a reactive, administrative role has deterred new entrants and heightened the demand for hybrid skills combining financial expertise and technological proficiency. More recently, high inflation, supply chain disruptions and the pandemic have only exacerbated the need for credit professionals.
With the growing need not only to upskill the current workforce in automation but also to attract young and tech-savvy professionals, companies will be expected to unlearn, relearn and quickly adapt to the constantly changing landscape in the coming years.
Did you know?
Onguard research in 2024 showed that 45% of finance professionals in the Netherlands feel resistance from colleagues when digitising financial processes.
Trends in credit management #3: The impact of AI expected to grow
AI has been one of the constant trends in credit management in the past few years. For example, the surge in popularity of ChatGPT in late 2022 has put AI in the spotlight for its potential to streamline work processes in every business, including the finance sector. An Onguard survey of interim credit managers in the Netherlands in 2024 showed that almost half of the respondents (45%) see AI as the technology with the greatest impact on financial processes.
While more than half (51,8%) find AI adoption in credit management as leading to significantly better decision-making, two-thirds (66,7%) see the current impact of AI as being in its early stages.
These findings were confirmed in the latest Deloitte CFO Survey, based on a sample of over 130 Dutch CFOs from various sectors. While fewer than 20% of strategic decisions currently leverage AI in the Dutch finance sector, this figure is projected to surge to nearly 50% within the next five years. The areas of the highest priority of AI use were:
- Decision-making and efficiency (65%)
- Operational efficiency (51%)
- Customer experience (40%).
Trends in credit management #4: Growing digitalisation of work processes
The growing AI presence in the past couple of years has put work efficiency in the spotlight, due to its potential to automate repetitive, time-consuming tasks (credit scoring, payment processing, customer communications, etc.).
Onguard research in 2024 showed that nearly half of Dutch organisations (47%) already use ERP systems, and 21% use dedicated credit management software for accounts receivable management. Finally, one-third opt for more manual options, which have proven to be more error-prone.
Organisations that will find the best way to integrate AI tools to optimise credit management workflows and enhance risk assessment are likely to gain a decisive edge in 2025.
Trends in credit management #5: Increasing attention to security processes
While security in credit management is getting growing attention, the adoption rate of a solid cybersecurity process is still too low. This becomes evident in advice from the Cyber Security Council to the Dutch government earlier this year, which highlighted the vulnerability of Dutch companies.
A significant portion of the credit management workforce consists of non-digital native professionals, leading to gaps in awareness and expertise around IT security. This is why investing in security training and collaboration with IT departments is gaining increasing attention in the sector.
There is a road to win, as the GenZ of more digital natives enters the workforce, said Adriaan Kom in an article on VCMB earlier this year.
“Don’t coach younger people, but get yourself a young coach. It’s not only fun but it also helps you understand the future. The tech landscape is changing so fast. Never stop learning from the younger.”
Did you know?
As part of the Visma Application Security Programme (VASP), Onguard has achieved a Platinum security status for its credit management solution CreditManager. This enables companies to make security, legal compliance, best practices and training part of their operations. Find more here.
Do you need help starting up your credit management strategy in 2025? Reach out and we’ll tell you how.
