Tired of tricky customers and suppliers damaging the financial position of your manufacturing business? Follow these credit risk-reducing tips to stay one step ahead.

Biggest credit risk factors for manufacturers

As a manufacturer, your network of influence is vast– especially in a competitive market. Unfortunately, trying to stay ahead of the curve can also leave gaps for businesses with unreliable payment behaviour to find their way into your supply chain and impact the financial health of your business.

Whether it’s a customer that disappears after a massive order, or it turns out your main supplier is on the brink of collapse and can’t provide you with materials anymore, falling into the wrong type of business partnership can have lasting repercussions for your company and, potentially, your own credit score if you don’t act quickly enough.

So, what can you do to minimise your risk of working with unreliable customers and suppliers?

How manufacturers can reduce credit risk

The first step you can take is to identify who your high-risk customers and suppliers are before they adversely affect your business. Don’t waste any more time or energy chasing overdue and unpaid bills. Be proactive and set clear credit policies from the beginning to deter those potential customers and suppliers that won’t pay on time.

Another sure-fire way to be extra diligent in avoiding delinquent debtors is to use credit management tools. With resources such as routine credit reports and customer monitoring, you can be alerted and updated in real-time on the credit risk and ongoing financial health and habits of your new and existing customers and suppliers.

CreditorWatch’s comprehensive, all-in-one credit reports are easy to understand and provide you access to an extensive database you can’t get anywhere else. With our comprehensive credit reports, your business will gain deeper, more actionable insights and be able to develop a better risk management strategy, suited to the size of your business and the financial performance of your customers and suppliers.

Unfortunately, it’s not always easy to identify high-risk debtors from the get-go, so what can you do about putting safeguards in place to protect your business when payment defaults occur.

Ensure your goods are protected in the first place by becoming a secured creditor under the Personal Properties Securities Register (PPSR). By registering under the PPSR, you can claim debts from your insolvent or bankrupt customers and suppliers sooner rather than later, and don’t have to compete with unsecured creditors for your dues. In turn, by employing the help of our PPSRLogic tool as well, you’ll be able to simplify the way you create, manage and renew PPS registrations, saving your company time and money in the process.

Finally, above all else, ensure your accounting and paperwork are up-to-date by streamlining your debt collection process. With CreditorWatch, you can automate your debt recovery process with our suite of automated tools and get paid faster, all while maintaining professional communication between you and your customers and supplier.

Our tools can also seamlessly integrate your Xero and MYOB accounting packages with our system, streamline your accounts receivables process and immediately highlight risky debtors directly in your accounting dashboard.

Giving you only the highest quality of services when it comes to protecting your business from credit risk and risky business partnerships, CreditorWatch is here to help you keep bad debt off your radar for good. Contact us to get started today!