Simplify Your Trade Credit Approval Process

Trade credit is the lifeline of SMEs in Australia. In fact, businesses of all sizes rely on commercial credit. It ensures that they have the resources to meet clients’ needs, whether they have enough liquid assets or not. However, the businesses supplying this B2B credit take on high levels of risk.

Over the years, financial professionals have developed solid criteria for determining good vs problematic credit customers. Even so, the process of applying that theoretical knowledge to credit decisions is time-consuming. Growing numbers of companies are turning to technology to streamline the process.

How Companies Streamline the Trade Credit Process

When making a lending decision, companies need to strike a balance between completing a thorough review and completing the process as quickly as possible. The most efficient way to accomplish this is to leverage the power of technology.

1. Eliminate Data Silos

Information silos present one of the greatest barriers to efficiency and transparency. While some definitions refer to worker silos, others refer to systems. Using software that allows integrations makes it easier to break down both silos by making information more readily accessible across platforms. This can also significantly reduce the 32 days per year that workers waste just switching between different apps.

2. Set Your Criteria

Over the years, your financial professionals and managers have likely developed criteria for identifying the ideal vs worst-case customer. Even if it seems like just a feeling, there are specific criteria people have come to look for. Take the time to write these down and organize them. Then, break them into tiers. This makes it easier to simply match customers to their criteria and the corresponding credit limit.

3. Automate the Process

Simply having established criteria in place can do wonders to streamline your trade credit process. However, doing this manually introduces the risk of inherent biases or even backdoor deals you would otherwise not approve of. Leveraging technology to automate the process can reduce these and other risks.

4. Monitor and Make Adjustments

After deploying your automated credit approval process, keep an eye on how well it performs. Complete manual reviews to determine whether the criteria matches real-life decisions. It is also necessary to review credit usage and payments per customer to see how well the criteria leads to accurate projections about creditworthiness.

5. Improve Criteria

As you gain more insights from monitoring the situation, make adjustments to your criteria. Ideally, you should only change one or two items at a time. This ensures you can track what created the results you later see. Adjustments can also take place on a per-customer basis. For instance, you could provide more credit to customers who pay their bills on time and less credit to those who do not.

Why You Should Automate Trade Credit Approvals

After experiencing the remarkable results of simply using an established checklist, you might hesitate to go any further with investing in automation technology. Consider these benefits of taking the next step.


In today’s competitive environment, forcing customers to wait is the path to losing them. There is almost always a competitor waiting for the moment to swoop in and offer a faster alternative. Automating the approval process makes it easy for customers to know immediately whether they can receive trade credit and how much you intend to offer.


Sometimes, unique situations might call for you to override the system’s automated response. For example, a large company might wish to work with your business but requires far more credit than you would otherwise extend to one company. Even so, automation ensures objective decision-making across the board for all businesses. This objectivity also makes it easier to accurately measure the effects of the decisions made.

Worker Efficiency

Financial professionals sometimes spend hours reviewing credit applications. This necessary but tedious task takes workers away from other job functions that could benefit far more from their human intellect and creativity. Consequently, automation increases worker efficiency.


When you leverage technology to automate credit approvals, it generates analytical insights. You can use this real-time data to make informed decisions for your business. For example, data could help you determine the seasons when the majority of customers struggle to pay.

How PencilPay Simplifies the Process of Offering Trade Credit

Do you have 15 minutes? Good. That’s all it takes to configure our platform and get started on your credit approval automation process. Check out some of the many features we bring to the table.

Online Credit Applications

Never process paper applications again. Make it easy for customers to complete an application in just 60 seconds. Customers begin by entering their ABNs, the person you will have contact with and a payment method.

Payment Plans

Global economic struggles or internal problems with a specific customer’s business can cause payments to lag. If the customer had a good payment record before this, offering a payment plan can help you collect your payment while maintaining a strong relationship.

Credit Checks

When your customers onboard via our platform, we retrieve up-to-date credit information. We rely on data from Equifax when helping you make an informed decision about whether to extend credit and how much to offer.

PencilPay Score

PencilPay has developed our own criteria for determining the likelihood that a customer will pay debts on time. This score changes based on new information coming in from payment performance and credit usage.

Buying on Account

We do more than just simplify the trade credit process. Our software also simplifies the process of your customers using that credit to place orders online, just like customers at a B2C business.


We make it easy to eliminate your information silos by integrating with all major inventory, credit and accounting platforms, including:

  • Quickbooks
  • Xero
  • MYOB
  • Woocommerce
  • Unleashed Inventory

We understand that there are many other trade credit software options claiming to provide the same quality of service we do. To prove that we offer the best solution, we offer a 30-day risk-free trial. Thereafter, you can continue with our service for as low as $49 per month. Choose a plan to get started.