For businesses that trade with customers on credit terms, staying ahead requires more than just ambition – it demands smart decision-making, streamlined business processes, and a sharp awareness of customer needs.
So, the pressing question arises: How can small and medium-sized businesses (SMEs) access the strategic expertise, operational maturity, and efficiency that larger corporations possess, without breaking the bank?
The solution lies in gaining a deep understanding of your customers’ historical payment behaviours. By delving into their past actions, you can identify potential risks that might impact your business negatively. On the other hand, possessing data on favourable customer payment behaviours provides an opportunity to capitalise on growth. This invaluable insight serves as the foundation for crafting well-suited credit terms. But it’s not just about setting terms; it’s about actively monitoring their payment patterns and overall business conduct, all with the aim of automating your end-to-end credit management system and optimising the management of receivables.
That’s where CreditorWatch’s suite of credit risk solutions comes into play. In this blog, we’ll take you on a journey through CreditorWatch’s affordable suite of solutions, exploring how each component seamlessly flows into the other to empower SMEs with the tools they need to thrive.
Online application form
The journey begins with CreditorWatch’s user-friendly online customer onboarding tool, ApplyEasy, an automated platform that makes credit assessment faster and more convenient for customers.
Each time a client business in Australia intends to establish a trade credit arrangement with another business, they are required to submit a credit application. Historically, this has been done with large reams of paper documents, manually recorded, and verified piece-by-piece. Paper-based applications are prone to human error, fraudulent attempts, and take up valuable time of staff with back-and-forth verifications, sometimes taking weeks.
ApplyEasy was designed to provide businesses with a modern credit application solution for this outdated paper-based credit application process. Now businesses can onboard potential new clients online, verify their information, identify risky entities with the support of CreditorWatch’s extensive business data and insights, and begin trading with confidence in minutes.
But that’s not all! By utilising ApplyEasy’s auto-filling fields directly from the Australian Business Register (ABR), the accuracy of input information is improved, expediting the assessment and approval process. This efficiency eliminates the need for time-consuming back-and-forth follow-ups with customers, ensuring a smoother experience for all parties involved.
Automated credit decisioning
Typically, credit managers would follow their established policies and manually review each customer to determine if they meet their requirements for credit approval. This process is a manual and repetitive procedure that can be streamlined through the utilisation of the ‘credit decisioning engine’ within ApplyEasy.
Through ApplyEasy, application outcomes (referred to as ‘recommendations’ or ‘decisions’) can be swiftly generated within seconds, as opposed to the previous duration of minutes or even hours. This not only expedites the approval process but also mitigates the risk of credit policies being subject to varying interpretations by different personnel within the business. As a result, customers can now secure credit approval within minutes of submitting their applications, eliminating the previous wait time of hours or even days required for manual assessment and approval.
Business credit reports
Credit reports are a vital source of insight into a customer’s financial health, behaviour, and risk profile. These insights are crucial in determining the appropriate credit limit, payment terms, or whether credit should be extended at all. Armed with these insights, businesses who extend goods or services on credit terms can make informed decisions that strike the right balance between opportunity and risk.
But what’s in our credit reports? CreditorWatch’s credit reports show the essential information in a clear user-friendly format to help you decide who to do business with, including:
- Credit rating – from A1 to F and a numerical score from 0-850.
- Number of credit enquiries.
- Defaults registered against the company.
- ATO tax defaults.
- Court actions.
- Cross directorship information.
- ASIC notices published against the business.
- Trade Payment insights.
- Other important adverse data.
CreditorWatch offers unique insights into the payment trends of Australian SMEs through our Trade Payment data. This data can provide predictive indications of a business’s financial health, particularly if they are struggling. Typically, small businesses are the most likely to experience delays in receiving payments, whereas larger businesses and essential service providers usually receive priority in payment to maintain their operations. If a prospective customer has a low payment rating, it could be an indication that they are facing difficulties in settling their payments with other businesses, which might extend to your business as well.
Need to do further due diligence checks? Log in to your CreditorWatch account to access more than 4,500 different searches and services such as land titles, property valuations, police checks, and Ultimate Beneficial Ownership (UBO) checks, Politically Exposed Persons (PEP), and sanctions list checks.
CreditorWatch’s RiskScore, available on all its credit reports, indicates a business’ creditworthiness and predicts the likelihood of default… Click here to read more.
A credit report details a potential borrower or debtor’s risk to the lender or creditor. A credit reporting agency, such as CreditorWatch, analyses large… Click here to read more.
When approving or rejecting customers for new lines of credit, it is recommended that you check them for creditworthiness and probability of default…. Click here to read more.
Monitoring and alerts
Consistently monitoring your customers for increasing credit risk and adverse events is critical to protecting the cash flow of your business. Thankfully, CreditorWatch’s 24/7 monitoring and alerts tool eliminates the prospect of any red flag slipping through the cracks. You can rest assured that as soon as critical information is updated, we will automatically notify you via email.
The business information monitored by CreditorWatch is extensive – covering a wide range of variables that may potentially increase the risk exposure to your business if left unchecked. The different categories of data covered include:
- Adverse events and high-risk indicators including customers involved in court actions, payment defaults, mercantile enquiries and insolvency notices.
- Entity status changes such as deregistration’s, administrations, liquidations and ASIC strike-off actions.
- ASIC and ABR changes such as director, shareholder, address and business name changes.
- Adverse cross-directorships and bankruptcies
As experts in assisting clients to avoid credit risk and defaulting customers, we know that any change to the above information could impact their ability to repay your business instantly. If too many high-risk events across your customer base are ignored for too long, they may ultimately threaten your business with insolvency. With the CreditorWatch 24/7 monitoring and alerts service at your disposal, you’ll never miss a red flag again.
“With CreditorWatch’s 24/7 surveillance, we never miss anything. We receive instant alerts about any potential issues with our customers. This helps us to stay on the front foot and protect our cash flow.”
Sarah Harkness
Cattle Dog Digital’s Co-founder and Director of Revenue Operations
Debtor risk analysis
The ability to predict and proactively manage risk is a game-changer for SMEs. However, you may not have the time or resources to perform constant monitoring or in-depth analysis of your customer base concerning the payment trends and terms of your clients.
DebtorLogic is CreditorWatch’s interactive debtor risk analytics platform that allows you to identify payment trends and detect early warning signs of distress across your debtor accounts. Our exclusive trade payment data showcases how businesses in your industry are being paid, and allows you to compare against the industry average, so you can be proactive about how each debtor account is managed to minimize your overdues, and, ultimately, strengthen your ledger.
The best bit? It’s intelligent analytics that provide user-friendly insights through interactive and color-coded visuals that anyone can understand. Empowered with this visibility, businesses can take a proactive approach to risk management, reducing the likelihood of accumulating overdue invoices and improving their cash flow.
Check out the video below to hear directly from our customer, Timberlink, about their experience with DebtorLogic.
Automated collections
It’d be nice if getting paid was as simple as doing a good job, sending the invoice, and then receiving the payment within a few days. Unfortunately, it rarely runs so smoothly. Many businesses spend hours manually sending email payment reminders, juggling spreadsheets with notes about customer interactions, and working out who exactly to chase first.
Automating the collections process helps businesses get paid faster, more efficiently. An automated process:
- Reduces the burden of manual, error prone tasks
- Saves you time so you can focus on complex and strategic work
- Gives your customers a better, consistent payments experience
- Helps you take a proactive approach to chasing debt
- Removes decision-paralysis, there are clear steps to escalate debt through a consistent process
- Consolidates all notes about customer debt, interaction history and payment promise in one tool
CreditorWatch Collect gives you customisable collections workflows which send automated, branded communications at every stage of the debtor lifecycle, from upcoming payment reminders, 30, 60, and 90-Day Reminders, and Final Notices. Include email and SMS within your workflows as well as automate prompts to call debtors so you don’t waste time working out who is due to be called each day. You can review debtor days, assess your overdue ratio, track trends in days-to-payment, and access other crucial accounts receivables information.
Armed with this knowledge and tools, you can prioritise collecting from high-risk customers and avoid the added hassles and costs of involving a debt collector. Saving you time and money, all while maintaining strong customer relationships.
Get in contact today
CreditorWatch’s suite of credit risk solutions is more than a mere toolbox – it’s a strategic armor that empowers businesses with the capabilities, maturity, and efficiency typically associated with larger enterprises. By freeing up time, enhancing risk management, protecting business, and optimising cash flow, CreditorWatch paves the way for business growth in a competitive landscape.
Interested in learning more about how a real-time end-to-end credit management system can help your business? Get in touch with one of our experts now.
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