Sharing Your Payment Data Helps You and Your Customers

By Steve Meitzler  ||  November 29, 2019  ||

The business community is a rapidly changing landscape as businesses start up and go out of business every day. How does one differentiate the customers that are going to pay on time and those that have no intent to pay at all? What real consequences are there for a business that purchases on terms but doesn't pay its obligations on time or at all?

Payment Data

In the consumer world if a customer does not pay for a product or service they will almost certainly be reported to a credit bureau and their credit score will adversely be affected. Using this threat of affecting a person's ability to get credit is one of the biggest incentives for consumers to pay on time. In the same way, sharing your AR file with a business credit bureau like Creditsafe can help you improve your collection efforts for commercial customers. The Trade Exchange Program enables you to report your customers to build their credit profile and give them one more incentive to pay you on time. 

Trade payments are arguably the most valuable information on a business credit report. Consequently, trade payments are the second most viewed item after the summary page on Creditsafe’s reports. Some businesses may be reluctant to share their trade file with a credit bureau because they don’t want to negatively affect their customers' credit score which could affect their ability to receive credit. While this is true, it is only one side of the story because the benefit to your customers is far bigger than the risk of lowering their credit score. 

The Trade Exchange Program enables you to report your customers payment history to build their credit profile and give them one more incentive to pay you on time.

Chapter 1

Why You Should Share Your AR File With Business Credit Bureaus

Here is two reasons you sharing your AR data helps you and your customers.

Chapter 1

1. Help Build Your Customers' Credit Profile

Sharing trade not only will help your company but it will also help your customers because it enables you to report on your customers to help build their credit profile. A company who has a long term relationship with a valued customer who habitually pays late may believe that reporting on them would lower their credit score; however, reporting on your customers will benefit them because it’s always better to have as much information on a credit report as possible and some less-than-favorable information is always better than no information at all.

Chapter 1

2. Improve Collections for Your Company

If you inform a customer that you are reporting their payment history to a credit bureau like Creditsafe, their ability to obtain credit, bank loans, and to purchase on terms will be directly affected. As a result, they will be more careful about neglecting their financial obligations towards you thus resulting in improved collections for your company.

The consumer credit industry has "the Big 3" that basically gathers the same information; whereas, the business credit industry is more diverse and because of this diversity, one credit bureau may have information that one or more bureaus do not. This is why we recommend reporting to as many business credit bureaus as possible. 

About the Author

Steve Meitzler is the Product Marketing Manager of Creditsafe USA. He is responsible for the product marketing and content creation for the US operation of Creditsafe. 

In his free time he likes to watch various fandom movies & shows with his wife and dog on their sofa, manicure his lawn, exercise, play drums and root for the Phillies.