 A good time to review your credit
control procedures At this time of year, insolvencies are often widely discussed. Many businesses that find themselves at risk of insolvency in December deliberately delay their insolvency proceedings in the hope that the festive period will be a chance to recoup money. Sadly, 2010 is no different and 130,000 firms are currently facing bankruptcy in the UK. As a result, a leading business growth accountancy firm, (Woods Squared) is urging small business owners to review the way they manage their credit control. “The blunt truth is that failure to get a grip of credit control, and the scourge of late payment could be massively damaging to small firms which are performing well despite the economic climate. We passionately urge those successful firms not to throw away their hard work by failing to enforce tight credit control procedures.” To read more, click here. CREDITFOCUS users can easily make reviewing their credit control methods a fulfilled New Year's Resolution. Credit checks and automatic monitoring of their customers can help them to re-establish how much credit they should be offering their customers and identify where they need to get tough on late payment. |
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Getting the most from
your CREDITFOCUS
Your guide to credit scores
and risk levels The CREDITFOCUS credit database is provided by Experian, the UK's leading credit reference agency.
When you search for a customer to credit check in CREDITFOCUS you are actually searching the Experian database. Experian operates one of the most advanced and comprehensive databases of business information in the UK, with details of financial performance, credit status and payment behaviour for all businesses of all sizes.
What they mean
The risk scores that are used in CREDITFOCUS allow you to assess the risk involved in doing business with a customer. On a scale of 0-100, a low score indicates a high risk and a high score indicates a low risk.
| 00 to 01: Extreme Risk |
| 02 to 15: Very High Risk |
| 16 to 25 : High Risk |
| 26 to 50 : Above Average Risk |
| 51 to 80 : Below Average Risk |
| 81 to 90 : Low Risk |
| 91 to 100 : Very Low Risk |
| ?? : Score suppressed |
To find out more, CLICK HERE
How they are calculated
Credit scores within CREDITFOCUS reflect the odds that a business will cease trading within the next year, allowing you to evaluate the risk that you are taking in extending them credit.
A major reason that we chose Experian as the data provider for CREDITFOCUS is that – as the UK's leading credit reference agency – they offer market leading expertise in scoring techniques.
CLICK HERE for more information on Experian's scoring methods. |
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 If your customer has anything from an above average risk rating up to an extreme risk rating, you should think very carefully about whether you do business with them and the amount of credit you extend to them. Ideally you wouldn’t trade with these customers at all. However that’s not always practical. For instance, if you have a good long-term customer that is rated as higher risk, it's likely you know more about the customer than the credit reference agencies do. Equally, just because your customer has a low risk score doesn't mean that you should immediately offer them more flexible credit terms. CLICK HERE to see our best practice guide to reducing your levels of risk when extending trade credit. |
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