I’ve been stiffed by clients twice – once for a substantial sum, and another time for a smaller amount. In both cases, I tried to do my homework on the clients before taking the gigs, but they were both small, privately held businesses and it was tough to gather information on how and whether they paid their bills on time. Checks with traditional business credit agencies didn’t turn up details.
Perhaps Cortera Circles™, a service featured recently at the Finovate conference, could have helped. A new peer-to-peer (P2P) risk information sharing tool, this service essentially allows business owners to join or form a “credit circle” to share information and insight with each other. Alex Cote, Vice President of Marketing at Cortera, described it this way to me: “Think of it as LinkedIn Groups meets business credit reporting.”
I already love LinkedIn, so I immediately saw the benefit of this service. Professional speakers, for example, could form circles to share information on whether speaking clients are paying on time. There could be groups for freelance writers, consultants, or virtually any type of business. Some groups already include:
- “HVACR” Circle – A Group for the heating, air conditioning, plumbing and refrigeration industry.
- “Manufacturing & Distribution – Heavy Duty Truck and Trailer” Circle – A group for manufacturers and Distribution of Truck and Trailer parts for new and pre-owned trucks and trailers, both over the road and off-road truck and trailer equipment.
- “Sign Manufacturer” Circle – A group for the manufacturers of architectural signs.
Credit circles aren’t new. They have been around for more than 100 years. Groups like NACM still have chapters where members meet in person to share payment infomation and collection strategies. Traditionally, though, many credit circles have been local. In today’s mobile economy where you may have clients all over the country, that may not cut it.
One of the first questions I had about Cortera Circles was whether there is a degree of privacy. If I were to form or join a circle, for example, I might not want others to see how much I am getting paid for a job. Or perhaps I want to warn others that a client is slow in paying, but I don’t want the client to dump me because of my complaint.
Alex Cote assured me that I could create a username that would not identify me personally if I chose to go that route. In addition, I could set up a closed or open circle. A closed circle would be invitation only, while anyone could join an open circle. Cortera subscription plans range from free (basic plan) to $49 per month (expert plan). When I think of how much time (and money) I lost to the two companies that stiffed me, spending a few bucks on business credit reports, or on a service like this, seems like a wise investment.