Every business wants to grow, but when your business involves providing credit terms or delivering goods and services before payment, it can be tricky to determine which businesses to work with and which to decline.  Historically, some large corporations have been wary of taking on small business clients who can be notoriously hard to evaluate due to having little or no information available on their credit files. Also, small businesses tend to be a volatile group – 49% fail in the first 5 years of operation. 

So, what’s the best way to find solid small business customers?  We recommend a 3-fold approach –

• Use blended data – a combination of business data and personal data on an owner or principal.
• Incorporate automated decisions that automatically approve accounts that meet your credit policy criteria and decline those who don’t. Manual review is reserved for middle-ground accounts, which saves you resources.
• Regularly monitor the health of our client portfolio with scoring and alerts.

Learn more by downloading our whitepaper with CFO.com , “A Widening Focus, Setting Your Sights on Growth Companies.”

We promise that blogging from our product managers will start again soon, but in the meantime, here’s more from the Marketing and PR front…

In honor of National Small Business Week, through May 30, 2012, we’re offering a 50% savings on our brand new BusinessIQ Express tool — just $375 for an annual subscription rather than $750.  It’s designed especially for small businesses and is the one-stop-shop for evaluating, monitoring and collecting from your B2B prospects, customers, suppliers and partners.

Small businesses sometimes aren’t familiar with the need to view credit history and financial background – or the need to monitor current customers. The reason evaluating and monitoring are so important is that they help identify and manage risk.  For instance, I would be less likely to sell to a business branded as ‘high risk’ because of their history of late payments and tax liens.  Also, I would want to be alerted if a regular customer suddenly filed for bankruptcy.  Having background knowledge could help me avoid the risk by declining the business or requiring cash payment.

In addition, it can sometimes be hard to collect from delinquent accounts. BusinessIQ Express provides easy-to-use letter templates and even additional contact information.

If you’re interested in taking advantage of the discount, go to: http://www.businessiqexpress.com/smallbusinessweek.

A little over a week ago, we announced BusinessIQ Express at the FinovateSpring 2012 conference in San Francisco. The new online tool was designed to help small businesses better evaluate and monitor business relationships, and collect on outstanding debt. 

Since its launch, we’ve received some amazing coverage in the media. For example, PC World named BusinessIQ Express one of the eight most promising new web apps and services for businesses that were launched at Finovate. We had some pretty stiff competition too; there were more than 64 products and services launched at the conference.

 Additional coverage came from Small Business Trends and YoungUpStarts, two influential blogs written for small business owners. Both sites wrote great pieces on the benefits of BusinessIQ Express, and discussed how the tool aims to help small businesses address the challenges of maintaining a profitable business. Additionally, the Small Business Trends blog was picked up by the Business Insider, a prominent business news website that syndicated the article across its web properties.

 What an amazing week! I can’t wait to see what the media says about BusinessIQ Express next. Stay tuned …

Are you a small business owner or do you know one? At FinovateSpring 2012 this morning, we announced BusinessIQ Express, an exciting online tool designed to help small businesses keep the cash flowing by helping them make smarter decisions about the businesses they work with. The tool helps users:

• Evaluate prospects, customers, suppliers and partners on their likelihood to pay on time
• Monitor business relationships via alerts and notifications of key changes
• Collect on outstanding debts and avoid future losses

In addition, it houses a library of tutorial videos and educational information including whitepapers as well as live customer service – everything a small business needs to make informed, insightful decisions. 

BusinessIQ Express is a complete package for one compelling price! (There’s even an option to user limited services as a free member.)

Our team is on a plane heading to San Francisco to announce our latest exciting solution at FinovateSpring 2012 tomorrow, May 8. If you’re not familiar with Finovate, it’s a twice yearly showcase of the most innovative financial and banking technologies. We showcased DecisionIQ Premier last year – and this year’s announcement is just as exciting.

Check back tomorrow for the big news!

In the movie “Casablanca”, the French police chief has a famous line, “round up the usual suspects”.  The Financial Stability Risk Score, or FSR, predicts bankruptcy or severe payment default and the factors used by the scoring model are familiar ones.

Among the warning signals used:  61+ and 91+ delinquency trades and derogatories such as being placed for collection, liens, and judgments.  A young business and certain industries are also correlated with business failure.

So if you have a relatively high margin business and are looking to spot the worst offenders the Financial Stability Risk Score is for you, and it works extremely well with Experian’s payment delinquency score, the Intelliscore Plus  in segmenting slow pay BUT will pay, vs. slow pay AND NO PAY.  That distinction is the difference between your receivables making it home safely or getting mugged.

 P.S. If you’re one of our clients, we just added Financial Stability Risk Score to our Premier Profile report – at no extra charge!

You do not have to be the owner of Greek Treasury bonds to be concerned about the risk of a major account going bankrupt or defaulting. Slow pay is one thing, but no pay is unacceptable. To help reduce the risk of no-pay accounts, we’ve developed a new product – the the Financial Stability Risk Score.

The score’s objective is projecting which companies have the highest risk of business failure and payment default. Fortunately, this severe event is much less likely to occur then payment delinquency (which scores like our Intelliscore Plus score predict).

For geeks, like me, who understand scoring methodology, you’ll be impressed with the score’s performance – the bad rate for the Financial Stability Risk Score, is a little less than 3%.
We will talk more about this powerful new score in future posts.

Experian’s quarterly Business Benchmarking Report released numbers for Q3 showing the percentage of dollars severely delinquent (91+ days past due) has increased by 15.8 percent compared to September 2010. This goes to show why businesses are struggling with their debt collection efforts. 

 How do you know if you are getting the most out of your collections strategy? 

Wouldn’t it be nice if you knew exactly when one of your uncollectable accounts freed up some capital?

In my previous blog, I discussed the traditional use of commercial triggers for portfolio management purposes. However, many businesses are using triggers with their collections teams to get paid sooner.

 Commercial triggers offer notifications on balance change decreases, which from a collections standpoint means your delinquent customer is paying other vendors. Why aren’t they paying you? A new inquiry or a new tradeline trigger also indicates that the business is actively establishing new credit relationships which is an indication that they remain credit active.

Additionally, some traditional triggers used for portfolio management can also be used for collections.  Score change triggers as well as days beyond terms triggers can track positive payment performance indicating your customer is in a better position to pay you.

So while the business landscape may not be changing anytime soon – this doesn’t mean your collections strategy shouldn’t change either.  Work smarter not harder and get paid sooner!

I split my time between the East Coast and West Coast. Last month, I guess the rain in the northeast was getting to me.  Seemed like between the August rain and all the bad economic news in the media, it was hard to find a lot to smile about.  But I did manage to find something, and it had to do with the fact that commercial scores were actually starting to tick higher. 

Well, it’s a new month, new quarter, and while the weather in the Northeast may not be any better, I am back in lovely North San Diego County, and the weather couldn’t be any better.  PLUS, it looks like the hammerlock the “gloomy Gus’s” had on the media is lessening as well.  So, while the news isn’t necessarily great, it isn’t awful either.  The National Federation of Independent Business just released their latest survey, and small business optimism actually ticked up ever so slightly in September.  But, the key thing is, that for the first time in 6 months, it didn’t decline.  What was also interesting was that “credit problems” were the number one issue for only 4% of the respondents.

We can couple that with Experian’s latest benchmark report, which shows that average commercial risk scores held firm for the third quarter.  And bankruptcy filings have also leveled off, at least through mid-year which is the latest data I’ve seen.

We are not out of the woods yet, and far be it from me to make any kind of prediction.  Maybe it’s because the sun is shining here, but I’m thinking things might be on the cusp of getting better…again.  I will be interested to see what the economic world looks like one year from today.  It seems like the sun may be shining a little brighter by then too.

The foundation of your commercial business begins at the customer level. With that, you’ll need a clear picture of your account’s health to make the best credit decision. Having data such as the following at your fingertips could prove to be very beneficial…

•  Additional business affiliations – Is your customer affiliated to any other customer you have within your portfolio? What is your level of exposure with all associated businesses?
• Small business owner business affiliations and asset information – For small business owners who are late paying or have defaulted, do they have any assets that can help you recoup on your funds?
• Credit score/changes – Has there been a shift in your customer’s score positively or negatively?
• Credit limit extended – If the score has changed negatively, do you need to reassess the account’s credit limit?
• Legal filing/trade alerts – Has there been any recent legal actions filed on your customer? If so, what is the impact to your account?
• Collection activities – Before you review the account for a credit increase, are you able to see if there are any collections activities that have historically taken place on the account?

Knowing if customers can pay you, when they will pay you and how much they will pay you are crucial components to protecting your bottom line. And having a global view of an account can help you do just that. Look for future posts from me, and let me know if there are any specific topics about managing your portfolio that you’d like to see.