How to Resolve Latent Issues at Work

In any business, especially in operationally complex industries like manufacturing, distribution, or transportation, it’s easy to focus only on urgent problems. But beneath the surface, latent issues—those persistent, low-visibility inefficiencies—can quietly erode performance and profitability.

If you're in credit, operations, or finance leadership, understanding and resolving latent issues could be the most cost-effective move you make this quarter.

What Are Latent Issues?

Latent issues are problems that don’t have obvious triggers and aren’t urgent enough to demand immediate action. Over time, they can cause serious damage. Unlike critical failures or urgent defects, latent issues operate in the background. They often masquerade as “just the way things work” or remain ignored due to more pressing priorities.

For example, latent issues in credit departments often emerge from:

• Outdated manual processes

• Process bottlenecks

• System gaps

• Lack of cross-functional alignment

• Inefficiencies in handling customer disputes or credit approvals

These issues may be invisible day-to-day, but their impact adds up fast, causing higher DSO, throughput problems, recurring delays, or employee churn.

Why Latent Issues Often Go Unresolved

Corporate teams are often resource-constrained and focused on throughput and delivery. Latent issues are deprioritized because:

• They don’t appear in high-priority KPIs until they’ve become systemic

• They often affect internal workflows rather than customer-facing outcomes (at first)

• Fixing them requires cross-team coordination or temporary disruption

The result? Internal audits may surface issues, but there’s no structured process to resolve them. The workflow slows. Errors recur. Revenue leakage compounds.

What to Ask About Latent Issues

If you’ve already spotted a potential latent issue, start with these questions:

• Is the issue becoming more frequent over time?
   Look for indicators like increased manual errors, customer complaints, missed deadlines, or deteriorating metrics (e.g., a rising DSO). Consider slow progress regress if competitors are improving at a faster rate.

• How severe are the consequences?
   Consider the frequency and scale of the impact:

  • Time delays in your process

  • Labour hours spent redoing work

  • Customer or supplier dissatisfaction

  • Risks to compliance, legal exposure, or brand reputation

  • Number of teams or stakeholders involved

If you haven’t identified a latent issue yet, perform a root cause audit:

• Gather recurring complaints or inefficiencies

• Map them to underlying causes

• If one underlying cause is responsible for many problems—but hasn’t yet caused a crisis—you’ve likely found a latent issue

Cost-Benefit of Fixing Latent Issues

Once you’ve investigated a latent issue, your next step is to model the potential ROI of fixing it. Break the ROI down into clear costs and benefits:

Costs:

• Labour inefficiencies (e.g., redundant data entry or double handling)

• Time lost in approvals or dispute resolution

• Delays in throughput or decisioning

• Customer churn from poor service or slow onboarding

• Systemic risk exposure (e.g., fraud or compliance gaps)

• Hidden costs like low morale or reputational damage

Benefits:

• Labour savings through automation or streamlined workflows

• Faster timelines

• More accurate decisions

• Stronger customer retention and loyalty

• Less friction between departments (e.g., credit, sales, and ops)

• Scalability and readiness for upscaling or acquisition

Net Return

To estimate the net return of fixing a latent issue, compare the implementation costs with the potential benefits. One simple ROI formula is ROI = (total benefit-cost)/cost

How to Communicate Latent Issues

Internally

For internal buy in, connect the issue to your company’s goals. Focus on which aspects of the ROI your company cares about most

Example goals:

• Reducing DSO

• Expanding to new markets

• Increasing throughput

• Meeting compliance requirements

Use data to paint a before-and-after picture. If available, bring examples from other companies in your industry who solved a similar latent issue—ideally with measurable success.

Externally

If fixing the issue affects customers, explain how they’ll benefit. Framing the change from the perspective of better customer experience helps reduce friction during implementation. Some benefits to share include smoother onboarding, faster approvals, fewer disputes, or better overall service.

How to Fix Latent Issues

1. Decide what outcomes you want.
 Be clear on what success looks like. Do you want to reduce application turnaround time? Lower dispute volume? Improve data accuracy?

2. Set SMART goals.
 Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. For example: “Reduce credit application processing time by 40% in Q3.”

3. Prioritize what to fix.
 Not all latent issues need full resolution. Choose the areas with the most impact relative to cost.

4. Allocate appropriate resources.
 This includes both money and team bandwidth. Consider running a pilot project to validate your assumptions before a company-wide rollout.

5. Build accountability.
 Assign a project owner and establish clear metrics. Monitor results and hold regular reviews.

6. Make latent issue resolution part of your culture.
 Encourage teams to raise concerns early, even if they aren’t urgent yet. Regular internal audits and process reviews can help catch these before they escalate.

Final Thoughts

Latent issues are stealthy but powerful. For credit teams, these hidden problems can significantly drag down performance. But with the right mindset and tools, resolving them can be transformative instead of disruptive.

Many latent issues in credit operations can be solved with the right technology. For example, digitized credit applications not only improve turnaround times but also detect fraud and financial risk more accurately.

NetNow is an industry leader in credit management software. Book a demo to learn how we can help your credit team resolve latent issues with great ROI.