How do you spot a bad payer? What are the characteristics? And can you do it without a credit check? Read the answer in the article.
"Can you really spot a bad payer?" That was a question we received the other day from a customer. A question that immediately got us thinking about how to spot a bad payer - without using credit scoring.
Based on our many years of experience with debt collection and bad payers, in this article we focus on what you as a business owner should be aware of when spotting bad payers.
The following is far from a complete checklist. But it will give you a number of factors that you can use in the future to identify customers that you should avoid or refuse to give credit to for sales purposes.
We look at both general bad payers and those who are deliberately trying to cheat you and your business.
What does price really mean to you when you have no intention of paying your invoices? Probably not very much. Many bad payers often don't ask about the price and don't care what your goods cost.
There are many reasons why a customer might not ask about the price. But for some, it can be a sign that they have no intention of paying the subsequent invoice - avoid them at all costs.
There's an old saying that you shouldn't cross the river for water, but we see many bad payers doing just that. The worst bad payers already have such a bad reputation and reputation in the local area that they have to go elsewhere. If you get a customer from far away for no particular reason and the customer can get your goods in their local area, you should pay extra attention when selling your goods on credit.
How well do you really know your customers and their information? Many bad payers provide little, missing or very poor information about themselves. This can be an advantage for them when the invoice is sent. If you have little or no information about your customers, it can be difficult - perhaps even impossible - to collect on them.
It may sound a bit cliché, but we recommend that you use your experience from the industry and your other customers when taking on new customers.
For example, there could be strange or abnormal circumstances surrounding the customer that should pique your interest.
For example, does a new customer want to have their goods delivered to an address that is not their previously provided address? Does the customer want to pay in a special and different way? Does the customer have big gestures?
Is your customer a business with an ApS, A/S or similar legal form and is the company more than 1.5 years old? Then it will typically be possible to view the company's public accounts.
Public financial statements can be easily accessed online and can help provide insight into a customer's financial situation.
Remember that public accounts are a look back in time, so they don't always give a true picture of the company's current financial situation.
Many bad payers often choose two paths when it comes to paying your invoice; no response or a sea of explanations.
There are almost no limits to the excuses a bad payer will use to delay or avoid payment.
In other words, if a customer has excuses or doesn't respond after you've sent the invoice, you should pay attention.
Systems, advice or common sense can't always ensure that you avoid or spot bad payers in time - not the customers who are deliberately or unknowingly bad payers. But historically, credit scoring has proven to be one of the most reliable tools for finding the vast majority of cases. This is because a credit rating often takes into account a wide range of parameters and not least known facts about the customer, such as any previous known cases.
Qatchr is developed and owned by one of the largest debt collection companies in the Nordics, Collectia, with over 150 years of experience in debt collection.
This is the experience that we have built Qatchr on. With Qatchr, you can see a wide range of information about your customers, not least whether they are known bad payers. Combined with the above, Qatchr gives you an even better basis for spotting bad payers - before they actually become a customer in your business.
We are ready to help you every weekday 08.30-15.30 if you have any questions or want to know more about our services.
Monday 08.30 - 15.30
Tuesday 08.30 - 15.30
Wednesday 08.30 - 15.30
Thursday 08.30 - 15.30
Friday 08.30 - 15.30
Email: info@qatchr.dk