Trade payment data: Helping businesses avoid risky customers
Sydney, Australia, 5 August 2013: Veda, Asia-Pacific's leading provider of consumer and commercial data intelligence and insights, today announces that the Trade payment data will be available in Commercial credit risk reports to provide customers with early indicators of potential financial difficulty.
Veda’s analysis of trade payment behaviour shows this information to be a lead indicator of financial distress; specifically, that companies with invoices 16 days or more outside of payment terms are 3.8 times more likely to experience adverse in the next 12 months than companies that pay less than 16 days past due. Therefore visibility of the payment behaviour of an organisation, including comparisons against other organisations within the same industry, can help to avoid future bad debt.
In a sample case, analysis of one organisation that went into external administration revealed an increasing trend of “days late” when it came to supplier payments. In October 2012, this organisation was on average 23 days late. Four months later this had increased to 105 days, at which time a default of $49,000 was recorded and the organisation went into external administration. By using late payment behaviour as an indicator of future adverse, a creditor could have avoided a loss of $49,000 in bad debt.
“We are pleased to introduce Trade Payment data in credit reports, as part of our ongoing commitment to provide Australia’s leading commercial credit risk reports to the market” says Moses Samaha, General Manager, Commercial Risk at Veda.
“Now, with the inclusion of Trade payment data in Veda’s Commercial Credit reports, customers will receive early indications of payment difficulty, helping them make better credit management decisions.”
Veda’s customers that use Trading History or Company / Business Enquiry Reports will automatically receive the new data starting on the 5th August 2013.