Optimising Order-to-Cash: A Guide for Trade Creditors - Part 4

Part 4: Getting the most out of your existing portfolio by spotting and acting on opportunities and risks

Maximising acquisition opportunities and assessing risk exposure at the point of onboarding is important. But equal – if not more – consideration should also be paid to assessing your existing portfolio for any changes which may indicate risk or opportunity.

In the current business environment, it is crucial to pay close attention to the shifting fortunes of customers on your books, especially considering the changes the world has seen in recent years. Regularly reviewing your portfolio and better understanding your exposure has never been more important for trade creditors.

According to our poll with trade credit professionals, just 13% of trade credit providers conduct a monthly review of their entire portfolios. However, with Experian’s tools, businesses can gain valuable insights for managing their existing customer portfolios.

Graph showing regularity of when customers check their credit levels

Experian’s proprietary commercial risk scores, such as Commercial Delphi Gen 6, assess businesses within your portfolio for financial risk. It uses existing credit agreements, current account turnover data, and payment performance data to assess the commercial viability of the business over a 12-month period. Commercial Delphi Cashflow score overlays cashflow indicators on top of a measure of underlying financial strength to predict business defaults.

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Additionally, Experian’s insight dashboards provide a high-level view of the SME market and emerging opportunities, allowing businesses to adjust their strategy or risk appetite based on real-time data.

Experian also provides near-real-time updates on financial health, identifying where customer data points have changed and what it means for creditors.

With this data-driven approach, trade creditors can:

Get a comprehensive view of their credit-risk position.
Make better credit decisions, at pace, using insight to inform up-to-date lending strategies.
Treat customers fairly and effectively with informed, responsive decisions.
Avoid blanket credit limits that stifle growth and continue to lend to reliable customers.
Regularly review limits and orders and analyse trends to ensure they are getting the most out of their current customers without exposing themselves to unnecessary risk.

This process not only helps businesses unlock new credit limits for customers who need them but also identifies high-risk customers that require careful management and uncovers new opportunities for appropriate increases in credit lines. It also improves relationships with sales teams by identifying new opportunities and empowering the business with data to create new contracts with current customers.