As business owners we always strive to make it as easy as possible for our customers to purchase our products or services. Other than accepting credit cards we find our businesses extending credit terms to customers as a way to increase sales and build customer loyalty.
While extending instant business credit with terms as little as 30 or 60 day is just like offering an unsecured loan it’s a credit risk most of us are willing to take. We’re simply providing goods or services in return for a promise to pay.
But as many business owners have learned during these tough economic times, promises are easily broken.
However, by reporting your customer’s payment experience to the business credit bureaus you can reduce customer late payments, defaults, and improve collections. In fact one of my clients who were set up with D&B’s business credit builder program experienced a 25% reduction on his past due accounts once his customers were notified that their payments were getting reported.
Here’s a list of benefits you can expect:
- Confidentiality – Your company name is not revealed to other clients in order to protect the privacy of your information.
- Timely payments – Customers who know you are reporting to the business credit bureaus are less likely to default on their debt
- Improve Collections – Leverage the powerful brands of the major business credit bureaus in your invoicing and collections activity.
- Contribute to your customer’s financial health – Reporting your customers’ payment experience can help ensure that your clients don’t assume more debt with other creditors than they can manage
- Reduce Credit Risk – Through data sharing your business will have the ability to make more informed credit decisions and receive additional solutions from the business credit bureaus to further mitigate risk and identify opportunities.
Here’s how to get set up with some of the major business credit reporting agencies so you can start reporting your customer’s payment experience.
D&B Trade Exchange Program
If your business has more than 300 active accounts or is a current DNBi customer you can qualify to participate in the D&B Trade Exchange Program. This is a great business credit builder program with no fee or cost to participate and your customer data is secure at all times.
Small Business Financial Exchange (SBFE)
The Small Business Financial Exchange is a non-profit association consisting of national and regional financial institutions. It’s managed by Equifax and is a member-owned database of positive and negative small business trade line data including loans, credit lines, leases, business credit cards and SBA loans.
To participate in data sharing with SBFE you must be a financial institution or leasing company. If you are interested in joining the SBFE, call 888-201-6879 or send an email to firstname.lastname@example.org
Small Business Exchange (SBX)
With the development of the SBX database, Equifax now offers both banking and leasing payment experience information and non-banking trade receivable history. This is great news for small business owners who don’t fall into the financial institution or leasing company category required by SBFE. Now there is a single source of data from banks, leasing companies and trade suppliers.