Sometimes you have to say no to customers to avoid losses.  
Here is an expert’s best advice to help you separate the wheat from the chaff.  “In some businesses you have to keep an eye on this or you won’t survive,” says David Eriksson, Director of Risk & Credit at Bisnode. 
  
Once again, a customer is late paying their invoice. At best, it can be sorted out with a reminder. At worst, perhaps this time they’re unable to pay – which naturally affects your company. “Unfortunately this is a very common situation and different businesses are affected in different ways. For a small company, a credit loss of SEK 100,000 can jeopardize the whole business. For a larger company, it might not be as noticeable in the short term, but regardless of size, it takes a lot of time and energy to sort it out, making your own costs many times greater than just the sum you lost,” says Eriksson.

But there are signs that reveal the bad customers. Combine the checklist below with Bisnode RiskGuardian Suite and you’ve taken important steps to protect your company. 

 “Generally speaking, it’s important to keep track of changes in the customer’s business and behavior. If you don’t, things can rapidly go downhill. Then there’s no chance of stopping the situation in time”

“Generally speaking, it’s important to keep track of changes in the customer’s business and behavior. If you don’t, things can rapidly go downhill. Then there’s no chance of stopping the situation in time”

David Eriksson Bisnode Director of Risk & Credit


Which signs do you think are particularly important?
“Major changes to the board, especially in small and medium-sized companies, are important to follow up as in some cases it can mean something’s not right. Changes in payment behavior can also be a sign, which Bisnode Payment Index can help detect. If you notice that a customer is slower in paying, this is often a first sign that comes long before the first records of nonpayment.”

Protect your business and open up new opportunities 
Bisnode RiskGuardian Suite is a comprehensive solution that enables companies to constantly track their customers. It includes in-depth customer data analysis, credit ratings, monitoring of solvency and options for automated credit decisions. “We’ve been working on this for 30 years and we’re very good at identifying signs that a company isn’t doing well. Our tools facilitate quick decisions if, for example, you’ve not been paid. Is it an accident or part of a bigger pattern? This is where we can help, which makes your decision better founded.” Although it may be difficult to say no to a customer, the “missed” business may in fact have saved your own company’s future, according to Eriksson. “Sure, you may feel that you’re missing out on revenue, but it’s a way to protect your own business and not lose money. At the same time, our solutions can help open up new opportunities, where customers who’ve previously been refused are in fact the ones you should be doing business with.”

Bisnode RiskGuardian Suite

The umbrella for Bisnode’s credit tool to help you optimize your credit. The tool is based on several valuation models and can be integrated into the desired interface.  

– Monitors and analyzes new and existing customers through current credit information and provides an overall picture of the credit risk. 

– Contains Payment Index, which flags late payers. 

– Rates the payment ability of private individuals. 

– Based on the AAA credit rating system that best forecasts bankruptcies. Credit scoring models are also available. 

– Automates credit decisions and makes it possible to say yes or no to more customers with confidence as credit information is constantly being updated. Reduces handling cost while creating a smoother customer experience. 

– Fraud Solutions detects companies at an increased risk of bankruptcy through pattern recognition and analysis of previous credit losses. 


Five signs of bad customers
 
1) Slow payers 
Often a sign of strained finances. Important to track over time, both in internal systems and in Bisnode Payment Index. 
 
2) Record of nonpayment and debts  
Check the nonpayment. If it’s being dealt with by Sweden’s Enforcement Authority you should be on your guard. A recent debt is “worse” than an old one. 
 
3) Changes to the board 
If everyone at a customer’s company is resigning, stop your deliveries immediately and find out what’s happening. 
 
4) Falling credit rating 
Always check new customers and monitor existing ones. Contact the customer and ask them what’s happened if their rating falls.

5) The customer isn’t registered for corporation tax 
If the company fails to pay its taxes and social security contributions, the Swedish Tax Agency can withdraw its corporation tax certificate. It’s time to end the customer relationship.  



Bisnode Studio | Who can you trust?
How should companies act in a situation out of the ordinary? What is important to take into consideration and how do you evaluate business partners’ credits during a full-blown crisis? Listen to our experts on Credit Risk Assessment: Rikard Candell, Group Director Analytics and Peter Nyberg, Group Director Risk & Credit.



 

The future of risk and credit management: More customers. Smarter analysis. Speedier decisions. Less risk.

Our Services for Credit Scoring
How big is the risk that your new business partner goes out of business? Bisnodes Credit Information services help you see it before it's too late – for both local and global businesses, available as webservice and API.
Check our solutions here