As business owners, we always strive to make it as easy as possible for our customers to purchase our products or services. In addition to accepting credit cards, we find our businesses extending credit terms to customers as a way to increase sales and build customer loyalty.
And while extending a credit term by as little as 30 or 60 days 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 customers’ payment experience to the business credit bureaus you can reduce customer late payments and defaults and improve collections. In fact, one of my clients who was set up with D&B’s trade exchange program experienced a 25 percent reduction on his past due accounts once his customers were notified their payments were reported.
Here’s a list of benefits you can expect:
- Confidentiality: Your company name is not revealed to other clients to protect the privacy of your information.
- Timely payments: Customers who know they are reported to the business credit bureaus are less likely to default on their debts.
- Improved collections: You can leverage the powerful brands of the major business credit bureaus in your invoicing and collections activity.
- Customer financial health: Reporting your customers’ payment experience can help ensure they don’t assume unmanageable debt with other creditors.
- Reduced credit risk: Through data sharing with credit bureaus, your business can make more informed credit decisions and receive additional help from these bureaus to further mitigate risk and identify opportunities.
Here’s how to set up with some of the major business credit bureaus so you can start reporting your customers’ 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. There is no fee or cost to participate, and your customer data is secure at all times.
Small Business Financial Exchange
The Small Business Financial Exchange is a nonprofit 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, credit cards, and Small Business Administration 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 e-mail to firstname.lastname@example.org.
Small Business Exchange
With the development of the Small Business Exchange database, Equifax now offers both banking and leasing payment experience information and nonbanking 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.
Data sharing with SBX is open to any company that provides products and services to small businesses on an invoice basis. If you are interested in joining the SBX, call 888-201-6879 or send an e-mail to email@example.com.
Experian offers commercial trade reporting through the Internet via Secure HTTP. If your business is set up, it can only submit payment data via electronic transmission. There is no fee or cost to participate.
To set up a user ID and password to begin reporting your data online, call 800-478-0650.
By reporting your customers’ payment experiences with creditors across the country, you help other business decision makers reduce their credit risks and ensure the growth of your company and that of the business community at large.