Afraid Your Customers Can’t Pay?

Aug 30, 2022 | Blogs

Business Credit Tools Can Minimize Your Company’s Credit Risk 

As a credit or portfolio manager, you make crucial decisions. You must support your customers with business credit, and at the same time, protect the profits and cash flow of your organization. A natural risk of extending business credit is that disruption to a customer’s cash flow may ripple into your company’s account receivables. 

You need solid credit reporting data to judge the financial health and stability of your customers. Our business credit reports give you the insights you need for today’s decisions. They also provide the vision you need to manage future increases in account delinquencies.

Xactus allows you to make the best business credit decisions constantly. Experian’s Intelliscore Plus technology gives you valuable insights into your customer’s financial health:

  • Financial Stability Score – With this insight, you will identify businesses at high risk of default.
  • Recovery Score – Use for accounts already severely delinquent. Analyze your customer portfolio to assess which have the best chance of collection.
  • Intelliscore Plus – Use to map out the best path to maximize cash flow and minimize your exposure to risks.

These two variables create a 360-degree accounts receivable strategy to minimize and collect on delinquent accounts:

1. Prioritization of your customers

Once you’ve used Intelliscore Plus to analyze your portfolio, segment accounts  into the following categories:

  • Companies who can still pay, just a little slower than normal
  • The highest scoring accounts are given a chance to self-cure. As they age, they become a secondary priority
  • Finally, the lowest-scoring accounts – those customers who will require the most attention for collections. Consider negotiating payment terms and using caution with credit lines

2. Adjustments

Here’s where that “360-degree” strategy begins to emerge. Use the risk simulator inside Intelliscore Plus to see factors that might be impacting your customers’ businesses. Adjust your credit and collection decisions to maximize profit and cash flow.

With Intelliscore Plus, you can:

  • Assess which areas of the country, down to state/county level, are most impacted
  • View industry-specific impacts of events from highest to lowest
  • Adjust your strategy/ For example:
    • Need immediate cash? Focus on repayments from the best scoring accounts in lower-risk regions/industries first.
    • Want to maximize cash over time? Focus on slow pay, but will pay, accounts. In other words, accounts that are at a low risk for business failure and will pay  – just a bit slower than usual.
    • Highest scored accounts become your secondary focus for repayment.

With these tools you get the dual benefit of a solid account receivable strategy and better business credit decisions to minimize delinquency risks. They also allow you to protect your company’s sales and profit while protecting it from undue credit risk.

Interested in putting this into action? Contact your Xactus strategic account manager today and ask them about Intelliscore Plus.

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