New challenges as businesses resume trading
Restrictions are easing across states and businesses are reopening across Australia. As trading resumes under new and evolving conditions, most small and large business owners are eager but also hesitant, remaining cautious that things could change very quickly.
Re-emerging into the post-lockdown era, businesses need to be aware of new risks. During this transition period, new challenges include the inability to operate at full capacity, creating hesitancy when ordering inventory and estimating sales. Furthermore, your trading partners may be in a very different position compared to pre-lockdown. Some businesses may be reopening just to let their staff continue working despite not making enough money; others may be paying bills much later than usual due to debt built up over the lockdown. To mitigate risk, it is vital to understand where your customers and suppliers are at.
Businesses are relying on CreditorWatch during this uncertain current environment. CreditorWatch provides a suite of credit risk management tools enabling you to conduct credit checks on your trading partners, helping you ensure customers are able to make payments and suppliers are able to fulfil orders.
Businesses need to be prepared for sudden changes to remain resilient
The hospitality industry was significantly impacted when dining in became prohibited, but their resilience has been remarkable. Restaurants and cafes pivoted and took initiatives to create new takeaway and delivery services and bars moved to food services to stay afloat. Right now, businesses are cautious and aware how quickly things could change. It is crucial to be prepared if/when snap lockdowns occur. Restaurant owners, for example, may suddenly find themselves with thousands of dollars’ worth of perishable goods that they need to move via alternative options. It is essential to have contingency plans and prepare for sudden changes. In these instances, managing cash flow and developing strategic decision-making is key.
Gain confidence by analysing payment behaviour and credit risk
Deteriorating payment behaviour is a leading indicator of credit risk and reveals which customers are experiencing cash flow issues. CreditorWatch’s Scored Insights combines RiskScore and Payment Rating, helping you assess the credit and late payment risk of your customers and suppliers, monitor the payment score and be alerted when payment times start to deteriorate.
Payment Rating reveals a company’s payment trends over the past 12 months, including the average number of days it takes to pay its bills and likelihood to pay invoices on time. It compares its payment behaviour to its industry average, helping you better identify and avoid slow-paying businesses.
RiskScore is the most predictive company credit score and rating system in the market, helping you assess an entity’s creditworthiness and predict its likelihood of default in the next 12 months. These insights give you a competitive advantage, enabling you to make better data-driven credit decisions, avoid financial difficulties and determine a better crisis management plan.
Manage ongoing uncertainties with customer monitoring
As more businesses reopen in these uncertain conditions, it is important to constantly monitor the financial health of your customers and suppliers. CreditorWatch monitors your customers and suppliers 24/7 and alerts of you any adverse information like court actions, payment defaults, mercantile enquiries, insolvency notices and deteriorating payment times. These are early indicators that a trading partner may be financially struggling, enabling you to proactively mitigate risk and avoid bad debt.
CreditorWatch empowers businesses to trade with confidence and protect their cash flow. If you’re interested in how your business can benefit from Scored Insights, get in touch with us today.