In the world of business-to-business (B2B), it can be a challenge to manage late payments from customers. However, one proactive solution to minimize such occurrences is to assess the business creditworthiness of your customers based on their business credit score. In this article, we’ll explore a free option for checking business credit scores to help you get started.
What is a business credit score?
A business credit score is a reliable indicator of a company’s creditworthiness and ability to repay creditors, lenders, investors, and business partners. For B2B firms, this score determines whether a company is likely to file for bankruptcy within the next 12 months, based on factors such as revenue, payment history, public records, accounting statements, balance sheets, assets and liabilities, and more.
The most crucial component determining a company’s credit score is its payment history. An organisation’s age is also considered while determining credit scores. Other factors include the company’s size, the industry, and the firm’s debt load.
How to check business credit scores for free?
One of the tools you can use to check business credit scores for free is Credit Insights. This tool partners with the credit bureau Ilion to provide free credit assessments of your customers. To get started, simply search for the business on creditinsights.ezycollect.com.au and follow the instructions to obtain their credit score for free.
What can you find on the Credit Insights credit report?
Credit Insights uses two scoring models to help categorise your debtors into risk groups ranging from low to high.
- Late Payment Score: Indicates the likelihood of a debtor paying your invoice late. Higher the score, the more the risk.
- Failure Risk Score: The Failure risk score represents the chances of your debtor shutting down operations and filing for bankruptcy within the next 12 months.
How to use business credit scores in your accounts receivables?
Consider integrating Credit Insights with your accounts receivable software to make the most of business credit scores in your accounts receivable. This integration syncs credit and payment data to provide actionable insights into your customers’ payment behaviour, helping you make informed decisions about dealing with late payments.
Manage your credit risk with Credit Insights
In conclusion, business credit scores are a valuable metric that can help you manage credit risk and improve customer relationships. With the help of Credit Insights, you can access free business credit scores and make data-driven decisions to minimize late payments.
Learn more about how you can use credit score reporting to protect your business from bad debts. Speak with one of our payments experts today to learn about options for your business.