Credit Scoring

The best collection call is the one you don’t have to make

Preventing bad debt and collections is key to a successful trade credit operation.   It starts with making the most appropriate credit decision with the best available information. And once these decisions are made, they shouldn’t be set in stone, but constantly evaluated.  For small businesses it is simply not enough to ask customers for a credit application up front and check a few references. Ongoing credit monitoring will alert you to buyers that are experiencing financial trouble and allow you to adjust your credit offering accordingly.

Credit Score your Buyers

Use credit scoring to rate your buyer’s credit as Strong, Caution, Watch and No Credit (represented from green to red), to approve new trade credit applicants and to monitor the ongoing risk of your entire credit portfolio. A business that acts proactively based on the credit data of its customers is more likely to increase their receivables portfolio value by establishing a stronger stream of revenues with less bad debt and fewer slow paying customers.

Within our complete trade credit platform we provide integrated credit intelligence compiled from S&P, Moody’s, D&B and Equifax and ongoing credit monitoring, credit protection and lockbox services for much less than you could purchase these services individually for your business.

Set payment polices based on score

Setting payment acceptance policies of when and who to offer trade credit is the key in reducing collections. Not all buyers or invoices are best suited for trade credit. In the red zone, we recommend that you accept card payments. Extending credit only to credit worthy buyers, coupled with implementing systematic routine admin procedures like placing invoice verification calls and sending monthly opening balance statements, will effectively reduce your ‘days-sales-outstanding’ and write-offs.

Contact us for a consultation with a Vantage Payment Advisor.

"AR Best Practices’ credit scoring policy is a simple, precautionary step I can take to ensure that I'm working with the right customers and protecting my business." 
Mark Wecker, CFO of Southland Graphics