Do you really know & understand the financial health of your best customers?

Many small business owners are not aware that their biggest exposure to credit default may lie with their top five customers. It often comes up in conversation with business owners. The confidence, good relations and trust that is built up over time create a perfectly reasonable expectation that your large customers will pay on time because they always have.

So, long-standing customers are often provided with larger credit limits and given more time to pay their invoices. By giving these businesses this freedom, you are potentially leaving yourself in a vulnerable position when your large/favourite customer experiences a change to their financial health. How do you know what is happening behind closed doors?

According to Brad Bulow, Partner of Sammut Bulow Bennett Partners, “Through my research, I know that once a debt is due, you’re already five per cent less likely to collect it. Once another 30 days pass, you’re 10.1 per cent less likely to collect that debt”.

CreditorWatch supports businesses of all sizes, from small and medium sized (SMEs) to the larger corporates with a broad suite of credit-monitoring and risk-management tools to alert them to early warning signs when their customers face cash flow problems, payment defaults and insolvency issues.

A CreditorWatch Portfolio Health Check is a tool that performs a data wash of a company’s customer list. Data washes scan all customer data for adverse and inaccurate records and highlight these issues. By flagging the adverse data, we can shine a light on those customers that pose a greater risk to your organisation when extending credit.

Monitoring is one of the most powerful services that CreditorWatch provides to its customers. It alerts both corporate and SME customers to changes in their debtor lists. These changes are immediately highlighted, allowing you to make smarter and informed credit decisions before you are drawn into your customers financial woes.

CreditorWatch outlined the typical ‘road to administration’ in the 2021 Economic Road Ahead: Perceptions and Insights, detailing how ‘over 50% businesses that incur a payment default will go into administration within 18 months’. Check out more insights here. 

Borna Boltuzic is a Key Account Consultant at CreditorWatch who deals with large corporate customers every day. He says it is prudent to look to larger businesses for best practice when it comes to credit risk monitoring and management. CreditorWatch offers businesses the opportunity to scrutinise the data of their customers so there is a prioritisation of the management of the risk of insolvency. The alerts from CreditorWatch’s customer monitoring tool is a key part of the process and is loved by big businesses. After all, prevention is better than the cure.

You can get in touch with Hilbert or Borna at:

E: hilbert.klaster@creditorwatch.com.au

E: borna.boltuzic@creditorwatch.com.au