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While emails are often used, phone calls can be more effective, especially for high-riskaccounts. Besides driving O2C process improvement, the experts at Your Virtual Credit Manager can apply defaultrisk probabilities & other financial benchmarks to your AR portfolio to reveal actionable credit & collection insights.
Initial Sources of Customer Insights The new customer credit application is typically the initial source of customer credit insights, though a credit bureau score or rating will, in some instances, suffice for relatively small dollar transactions. Business credit is very dynamic, especially across a portfolio of accounts.
Share A Case in Point A parts distributor was having difficulty with collections and high dispute volumes. It is important to keep in mind that trade credit — selling on terms in a B2B environment — is greatly affected by the transactional process. it just might help them pay you sooner!
They assign actions according to available resources, ensuring that high-riskaccounts receive immediate attention. Dispute Prevention Proactively flagging potential disputes, AI agents analyze transaction patterns and customer behaviors to prevent revenue leakages before they occur.
Share The High-RiskAccount: Ideally you do not want to extend credit to highriskaccounts. This persona may exhibit characteristics such as a history of defaults, financial instability, industry volatility, or a poor credit rating. it just might help them pay you sooner!
They understood the dynamics that affected their customers and marketplace, as well as the credit controls needed to keep credit risk in check in this environment. They also kept very good records on their customers and their purchases, so there were no issues with transactional visibility.
Similarly, suppliers can evaluate the risk of late payments or default, allowing them to set appropriate credit terms. By verifying the financial standing of companies before engaging in any transactions, you can mitigate the risk of working with fraudulent or unreliable entities. Get a free business credit report!
By avoiding the following common traps, or myths if you will, businesses can minimize the risk of non-payment or default and make better informed decisions about extending credit to other businesses that will boost sales and profits. Highrisk customers shouldn’t be granted credit. That’s the bottom line.
Trade credit insurance has become a vital tool for businesses looking to protect themselves from the risk of non-payment by customers. This type of insurance acts as a safety net, covering unpaid invoices when clients default or face financial difficulties. Higher-risk customers or industries lead to higher premiums.
In a recent survey report by Atradius , respondents asserted that bad debt accounted for 8% of all their B2B invoices, with a further 50% being past due. The inherent risk of default in businesses extending credit makes bad debt accumulation more than a cursory concern, it is a challenge that can strike at the heart of your operations.
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