What You Need to Know About Business Credit Evaluations
Can you really help your company avoid bad debt by conducting manual, labor-intensive business credit application reviews? With so many data sources available, many of which are not reliable or timely, plus the need for a quick decision and you have a recipe for bad decisions.
Consider this:
- Manual business credit decisions are costly when you calculate both the direct and indirect costs.
- You may only see what the applicant wants you to see, making it easier for fraudulent enterprises to put their foot in your door.
- The more time you spend building a comprehensive picture of the new customer, the greater the cost.
Thus, the need for online data sources that you have pre-verified as capable of supplying accurate business credit evaluation information quickly.
- Business information providers collect data from multiple sources, then verify and consolidate the data to provide a one-stop shop for obtaining a multidimensional view of the business in question.
- Many business information providers add scoring to make the information instantaneously actionable. For example, Dun and Bradstreet uses Paydex.
The goal is to develop an evaluation matrix based of business information on the information collected, so that lower risk customers flow easily through the system, while blocking marginal and high-risk accounts. Then you can use your experience and expertise on the questionable accounts.
Can you really help your company avoid bad debt by conducting manual, labor-intensive business credit application reviews?
Business Takeways
- Manual credit decisions can be a bad approach for sound evaluation of business credit
- Dun and Bradstreet has multiple online solutions that can supply a multi-dimensional view businesses you’re evaluating
