Growing Your Small Business – Three Ways To Protect Yourself
Cash flow is an integral part of any business, particularly for small and medium-sized enterprises (SMEs). For a small business, undertaking thousands of dollars’ worth of work or providing stock to a company that becomes insolvent and not being paid, can mean the difference between success and failure.
There are approximately 546,000 small businesses in New Zealand, yet many don’t have access to the resources larger businesses have when assessing the risk of their customers. SMEs need the tools to look into the businesses they are currently, or may soon be working with, to assess their creditworthiness and the credit risk they may pose.
Equifax New Zealand’s - ‘Business Reports’ can tell you a lot about a customer and provide you with insights to help minimise the risk to your business. Here’s how SMEs can equip themselves with information to help:
1. Understand who you’re doing business with
Validating a customer’s New Zealand Business Number or NZBN is a good starting point to ensure they are registered. You can also set up ‘Business Alerts’ for any businesses that are of interest to you, such as your key customers. You’ll get notified if any details of the businesses you work with change, this way you’ll always have up-to-date information on the businesses you deal with.
2. Check if a customer is high risk
You can request a ‘Business Report’ for customers that you’re extending credit to. You’ll be able to see how credit worthy they are and whether they’re good at paying their bills on time. Indications of financial stress often appear on a credit report – so you’ll be best placed to mitigate your credit risk.
3. Negotiate payment terms
When a company starts struggling financially, one of the first things they may do is stop paying their suppliers. Having credit information at hand can help you minimise risk and manage your payment terms with them.
Equifax offers ‘Business Reports’ to help SMEs with valuable insights they may need to make informed decisions on how best to engage with customers.
Contact us to find out how Equifax business solutions can help you manage your credit risk.