Avoid getting caught up in a customer’s negative spiral
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Avoid getting caught up in a customer’s negative spiral

In the UK, nearly one-third of SMEs have experienced late payment issues, with 27% of SMEs experiencing a squeeze on profits. Indeed, margins are coming under pressure from all sides at the moment. Late payments undermine healthy businesses and reinforce the downward spiral. However, monitoring can help prevent many disasters.

Do you recognise your situation?

When you start a business relationship, you probably have a clear idea of the company. The new customer has successfully completed the acceptance procedure. But, this is obviously no guarantee for the future. A customer in good financial health today may not be in six months time. Even though the customer has paid correctly in the past, this does not mean they will always continue to do so.

Of course, you must monitor the whys and wherefores of your customer portfolio, but on a limited scale. You can read messages online, go on a rumour hunt or consult annual accounts. And, of course, you’ll have an overview of the behaviour of your customer in terms of payment. But if you have a large customer portfolio, you know that it is not easy to keep doing this thoroughly for every customer, every time. Indeed, details may escape your attention. To avoid this, you must engage a team of employees to collect, analyse and properly interpret all the information. Monitoring spares you from going to such lengths.

Monitoring guarantees peace of mind

Monitoring is an alarm system and you can look at it in both a negative (risk detector) and positive (opportunity detector) light. It immediately informs you of modifications to your customer portfolio. The better informed you are, the more quickly and effectively you can react to change, of whatever nature.

Monitoring is now integrated into the Graydon Insights platform, the online portal that includes all the tools for detecting risks and opportunities. All you need to do is to indicate the numbers of the businesses that you wish to monitor permanently. Has your customer been declared insolvent? Have their scores (credit limit, payment behaviour) changed? In a positive or negative sense? Monitoring will inform you of this immediately. You won't miss a thing because you will receive a message in your inbox straight away (depending on your settings).

When should you use monitoring?

With some business relationships, you make a bigger or more long-term commitment. A project that extends over several years and involves large sums of money also involves higher risk. Imagine that one of these customers is having problems due to improper investments or poor budgeting. If the customer cannot pay their invoices on time, you would want the alarm to be raised as soon as possible. This is exactly what monitoring does.

In sectors where customer conclude contracts lasting several months or years (with monthly or quarterly invoices), monitoring is also an essential tool for keeping a close watch on the financial health of your customer portfolio.

Even the most stable supplier can have problems. If this takes on vital importance for your production process, you would prefer not to be confronted with unpleasant surprises. Of course, you want to avoid procurement being compromised. In this sense too, monitoring is a precious tool.

Pay attention to opportunities

At the same time, you do not want to miss opportunities for growth. Are the scores of one of your business relationships heading in the right direction? This could be the ideal moment for your sales team to contact this customer.

You will always be aware of what is happening. You can immediately assess whether your business relationship is evolving positively or negatively and then react.

Monitoring brings together all the modifications that Graydon collects through several channels and informs you straight away. Flexibility and the ability to react quickly are more important than ever. This is the only way you can stay ahead of the competition and on top of the latest developments.

Want to know more about the Graydon Monitoring Tool? Our team will be happy to explain in more detail. For a free demonstration, please contact them on +44 (0)20 8515 1400 or at sales@graydon.co.uk.

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