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How to take your credit checks to the next level

Reading Time: 4 minutes

Protect Your Business with AI-Driven Credit Checks 

Signing any agreement before you have all the information is risky business. As a business owner, it’s in your interest to exercise due diligence to ensure you know who you’re getting into business with. With every transaction, there is a chance you’re opening yourself up to the risk of financial loss. A bank would never supply you with a credit card without first assessing your creditworthiness. Why should it be any different when you supply goods and services to your customers?

Whatever industry or sector you work in, if you’re a B2B company selling a product or service, you’ll struggle to get ahead if you’re not willing to extend a certain amount of credit.

Using a personalised assessment through CreditorWatch’s Risk Rating system helps you better understand the financial position of your clients and stakeholders. With innovative AI technology and advanced algorithms, Risk Rating gives you regulatory insights into your customers’ credit history, current income, and likely future earnings.

Risk Rating enhances your company’s ability to make informed decisions and reduces the credit risk of customers not paying their bills.

Do I Really Need to Conduct Credit Checks on My Customers?

Smaller companies often skip credit checks, but from a business perspective, it’s not a wise move. By neglecting to carry out credit checks, you massively increase the risk of extending credit to customers who won’t be able to pay on time or have a high chance of going out of business and not paying you at all, increasing your risk profile.

Remember that many businesses are in a very different shape now than they were pre-pandemic; you may not know your customer base as well as you think you do. Supply chain disruptions and labour shortages are also more common, putting further strain on customers who are having trouble keeping up with payments.

Unpaid invoices affect your cash flow, limiting your ability to take on new projects and fill large orders. Bad debts also pose a potential risk as it means you’re unable to make timely payment of your own invoices, negatively impacting your relationships with suppliers. If it gets bad enough, your business could be forced to close its doors.

Credit checks using Risk Rating: AI-Driven Credit Score Technology 

Risk Rating is a unique, AI-driven credit rating tool from CreditorWatch that offers the most accurate and predictive credit score on the market. By combining our industry-leading data with advanced algorithms from leading data firm Open Analytics, Risk Rating empowers you to make smarter decisions about your business and instills enhanced due diligence.

A customer may outwardly appear to be financially stable, but there is a multitude of hidden factors at play. Big corporations can employ financial experts to conduct detailed analysis, but this is beyond the reach of small businesses. With Risk Rating, CreditorWatch is levelling the playing field.

In recent years, the power of AI computing has advanced exponentially. The latest technology is able to sort through huge datasets, running sophisticated analyses and credit reports without the risk of human error. By performing human-like tasks and workflows with pinpoint accuracy, Risk Rating provides any business with the resources that large organisations have been using for years, at a fraction of the cost.

Get Rankings Based on Extensive Datasets

Risk Rating uses a comprehensive range of datasets to rank businesses based on the level of risk they pose to creditors, assigning them to one of six risk levels from low to critical. This payment data is sourced from over 11 million tradelines every month, from sole traders to some of Australia’s largest companies. It includes the kind of information traditionally used to calculate credit ratings but also draws on a range of other information, like business maturity and geographical risk, that might affect a business’s ability to make payments.

Receive Alerts in Real Time

Risk Rating uses a unique, 24/7 business monitoring tool to alert you to adverse risk factors affecting your customers in real time. You will be sent an automatic alert any time one of your customers is affected by something that signals increased financial risk, such as payment defaults, court actions, or adverse director activity.

 

Transparent Ratings for Data-Driven Decisions

At CreditorWatch, we believe that transparency is key to helping you make the most informed business decisions. Many companies provide credit ratings that are little more than a number, with no clear information about how they got there. Risk Rating’s AI technology analyses all the available data to produce an in-depth, easy-to-read report. The risk assessment illustrates trends by using graphs and tables, and key financial performance indicators are explained in plain language. This format makes it easy to see how we arrived at a given ranking, so you have the whole story in front of you when you make your business decision-making.

Powerful Automated Features 

Our system offers a suite of sophisticated automation tools to automatically identify high-risk customers and validate the data in your portfolio. You can also speed up your risk management process by integrating Risk Rating with your existing Xero or MYOB account, pursue unpaid debts, and report non-paying customers.

Is Risk Rating Right for My Business? 

Extending credit without the due diligence processes of a credit check exposes you to unnecessary and potentially disastrous risk. Using the best available data, you can understand how much credit to extend to customers. With the benefit of ongoing monitoring and analysis performed by specialised AI technology and drawn from a broad, reliable dataset, Risk Rating could be the best and easiest financial decision you ever make for your business. Join more than 50,000 customers making informed business decisions and know who’s really on your books with Risk Rating.

Get in touch

To hear more about how CreditorWatch’s Risk Rating can help supercharge your credit checks, get in touch with our Customer Success Team at support@creditorwatch.com.au