Knowing how a company you are considering doing business with has paid other creditors is an important indicator of how you will be paid. Trade payment data, predictive scores, and trade references can provide valuable insight into whether a company has demonstrated a pattern of responsible financial behavior and is likely to pay promptly in the future.
Trade payment data is one of the best predictive indicators as to whether a company is likely to pay on time. Business credit agencies collect this data from third parties and use it to analyze how a company’s payment behavior compares with industry averages. They also use this data to create predictive scores, such as the Experian’s Intelliscore PlusSM v2.0, that predict the likelihood of credit delinquency. Trade payment data and predictive scores can typically be found in business credit reports.
Speaking with a business’s existing creditors can provide very important insight into payment behavior as well. If your prospective customer provides trade references, ask them the following questions:
If you are considering extending credit to a company be sure to check out its trade payment data and trade references. There is no better way to get insight into a company’s past payment behavior and how they are likely to pay you.
Contact us to learn more about how you can incorporate the business credit reports, trade payment information and predictive scores we offer into your credit decisioning processes.
Eric Kider currently is the Senior Vice President/General Manager, Data & Credit Solutions. He is a highly motivated senior executive bringing more than 30 years of dedicated experience and a proven track record of driving significant revenue growth and margin improvement within, both, the financial and information services industries. Eric possesses expertise in all aspects of business management, including the development and oversight of sales, operations, product management, technology, and customer service. He holds a BS degree in Economics and Government from Skidmore College and took graduate courses at Sheffield Hallam University (Sheffield, United Kingdom).