Financial institutions use technology and credit scoring strategies to manage lending activity. Now businesses lending to their customers by extending trade credit are learning the value of adopting credit monitoring solutions as an integral part of account receivable best practices.

The credit health of customers is top of mind for many CFOs today. Slow pays, delinquencies and credit losses have a major impact on companies of all sizes but are particularly harmful to small businesses that, in the past, have not had affordable credit scoring and monitoring solutions available.

As businesses emerge from the recession and sales pick up, the best practice is to determine those buyers with a higher probability of payment before extending credit. Like banks, businesses need processes in place to evaluate and assess the credit risk of their customers, and to extend more credit on better terms to support higher sales to those with the least risk and to limit trade credit or use alternative payment strategies for more risky customers.

Scoring solutions help business adapt to a changing economy. A lot can happen, even in a few short months. In these uncertain economic times, some customers will improve while others may decline.  Using software-as-a-service, web-based, AR Best Practice credit scoring technology to segment poor from better credit buyers can produce a competitive advantage.