August 03 2022
What can you do to ensure you're taking all the necessary steps to running a successful and pain-free business?
Independent businesses rely on a core, loyal group of returning customers to grow — and this doesn’t just mean consumers, this also includes trading partners, suppliers and service providers. It is crucial for them to understand the creditworthiness of who they're doing business with, and minimise the risk of receiving part or no payment for any invoice submitted.
The first step should be to investigate finances and obtain reliable credit checks. With bzTrack, you can run a credit report via CreditorWatch to find out a customer's credit rating and financial health. Armed with reliable and transparent insights, you are better positioned to make more accurate credit decisions and better manage risk.
On bzTrack you can pick from two types of report — Simple or Comprehensive. The Simple report includes company name, ABN and ACNs, whether the company is active or inactive, when the business was registered and most importantly, their credit score and credit history information. With this easy-to-view information you can quickly assess the credit risk and avoid bad debt of a company.
The Comprehensive report includes in-depth financial analysis and comprehensive credit reports (including unincorporated entities, trusts, sole traders and partnerships) plus any court actions, defaults on payments and much more. In the detailed report you’ll find information such as Average Days Overdue in the last 12 months, meaning that you set payment terms accordingly for each business you’re trading with.
Set your terms of trading for each customer
Not all customers are the same, so you shouldn’t treat them all the same. As over 60% of SMEs experience late payments, make sure you follow some simple steps before you find yourself chasing invoices. Set terms such as upfront full payment, deposit or a 30-day payment period. With bzTrack, the choice is yours so you can effectively control your finances. Once you’ve negotiated the terms, you can communicate the details via the platform so the customer knows when payment is due.
Keep monitoring and adjusting to reflect changes in circumstances
It is important to monitor your customers’ financial performance so you know if something happens that might affect their ability to pay you. If you have customers who you invoice regularly, you will have built up a history of the invoices you’ve raised and the dates that these invoices get paid.
Finally…Know your own credit score. It’s vitally important to be aware of how your company’s financials are reported when potential traders and customers are searching for you. If you don’t like the look of your credit score, are other people going to want to do business with you?
