How to pick the right customers and protect your business

When you’re on track to sign a contract with a new customer, it’s easy to only focus on what challenges you might face keeping your end of the deal. Do you have the capacity to deliver on time? Do you need to recruit someone with a slightly different skill set to carry out the work? Can you rely on your suppliers to provide the raw materials or other services you need?

But to protect your business’ cash flow, you also need to be confident that your customers can pay you for the work you’ve completed. It’s a basic expectation, but it relies on your customers’ financial stability – something that sits outside of your control.

It might sit outside of your control; that doesn’t mean there’s nothing you can do. With CreditFocus’ credit status monitoring service, you can feel confident that you’re always on top of your customers’ financial position.

Reduce the risk of unpaid invoices

With CreditFocus you can run a credit check on up to ten businesses. Before you agree to do business with a prospective client, you can get an instant insight into their finances. This will give you:

• A business credit score. See how risky the company appears to creditors on a scale of 1 to 100. You can then decide whether or not you want to work with them at all.
• A payment indicator score. CreditFocus translates Experian's credit data into a rating system that projects how likely it is that your prospective customer will be able to pay your invoice. It’s a quick way of showing whether they have a history of late payment.
• Key financial information, for example if they have any CCJs.

Credit monitoring over the long term gives you another important layer of protection. Add up to 50 businesses to your watchlist to get instant notification of any red flags (for example, a CCJ or credit status drop). If your customer’s circumstances change after you run your initial credit check, you will be alerted in good time to keep control of the situation.

How to use the information you get from credit monitoring

In some circumstances, you might decide not to take on a customer (or to end your business relationship early) if the credit check shows it’s too risky.

When you want to reduce your risk but keep the customer, you could alter your payment terms to get the payment upfront.

CreditFocus helps you set appropriate credit terms for a business based on their business credit score and payment rating. This helps you manage the risk of non-payment.

Every time you run a credit check on a customer, you will receive clear short term and long term actions you should take to mitigate the risk on late or non-payment, specific to that customer which has been worked out from their credit history.

CreditFocus also has several tools to help you recover payment that you are owed, including payment reminders and solicitor’s final warning letters. Having these tools to hand makes it easier to stay on top of a risky customer you still want – or need – to work with.

Protect your cash flow with CreditFocus

CreditFocus can help give you peace of mind that your customers are in a strong enough financial position to not pose a sudden risk to your business. Get access to the useful up-to-date information and robust risk-management tools that your business deserves. Start Your 30 Days Free Trial Today!