Settling payment with your business credit defaulters is a painful process. You get to hear different reasons and excuses for delayed or missed payments. However, it’s hard to convince yourself of those reasons. If you’ve been in the business arena for a longer time, you would know several tips and tricks to deal with vendors and suppliers. It’s understood that it’s not easy, but you can make yourself aware of certain ways to handle things on your own.
In a parallel scenario, you may not be losing money and interest in doing business with others when you know the essentials of protecting your business against payment defaulters. The first and foremost thing is to check their business credit report as it tells you a lot about their payment and credit history.
A business credit information report helps you obtain all the necessary financial information about other businesses, and you can determine your interest in working with them accordingly. Today, let’s look at a few simple ways that can help you protect your business from your debtors.
Know All About Them
In business, you deal with different kinds of people at different stages. For MSMEs, it’s important to maintain a healthy rapport with their suppliers, vendors, and investors. However, you should be smart enough to realize if you’re falling into suspected fraud. It means that your vendor may have procured the material but giving you all the wrong reasons to delay the payment. It could be possible that your supply chain is weak owing to the clever practices initiated by the suppliers. All this could hamper your business, and you may have to deal with your credit defaulters all the time. So, it’s better that you conduct thorough background research on them and their business. Market surveys, consulting other businesses, checking credit information reports and company credit scores, and accessing public documents can help you do the right thing from the beginning itself.
When you know your clients well, there’re fewer chances of fraud. There’s not much risk in lending them funds or doing business with them. But if you do have to settle payments, you can count on credit information bureaus like CreditQ that helps MSMEs and businessmen settle payments with their credit defaulters.
Set a Credit Limit
Understanding your borrower’s capacity is of utmost importance here. If you want to protect your business from financial debacles, you must know how to handle your vendors. Maybe you’ve got a good working relationship with your suppliers, but it does not necessarily mean that they possess the financial ability to repay the amount credited to them. You may make an exception for a few vendors, but you can’t trust anybody and everybody in a business landscape. So, it’s better to set a credit limit. It helps you save yourself from fraud, and you’ll have the cash to meet your daily needs as well.
Establish a Default Limit
When you anticipate the risk in advance, you make better business decisions. If you’ve given credit to a business and it’s troubling you with payment issues, you gain experience on how to deal with the next client. Setting up a default limit and deciding the minimum repayable amount can save your business from going into the loss. MSMEs have to deal with a lot of suppliers and vendors. They may consider an MSME like a back to meet their daily business needs. It’s not a healthy practice, and you should refrain from giving them that impression. Stick to a default limit and take stern measures if they fail to make the payment. The next step can help you know about the smartest way to deal with your debtors.
Report Your Business Credit Defaulters
Do you face problems asking for your money back from your credit defaulters? Well, it happens many times that your debtors go through a financial crunch and not able to repay you the amount. It’s equally possible that they prioritize other creditors before you and take time in payment settlement. What do you do in such a scenario? Do you allow them more time? Do you offer them a deadline? Do you approach legal authorities?
The simple solution is to approach a leading credit reporting company. You can list your payment defaulters on the CreditQ platform and get help in settling payments with them. Their team of specialists undertakes into account several measures and act as a middleman to bring a viable solution to the table. Once you’ve submitted all the required documents and gave all the relevant information about your debtor, the team then verifies your submission and starts the payment settlement process.
It’s better to save your time and effort and invest in growing your business rather than worrying about your business credit defaulters all the time.