Uncertain times? Here's how to control risk

Reading Time 8 minutes | Written by Arjan Bakx | November 5, 2020

Which business partners are starting to falter financially? Which customers will soon have trouble paying? Anyone who knows this can do business with peace of mind in these uncertain times. Altares Dun & Bradstreet's extensive database offers you exactly this insight. Extremely valuable, simple and affordable.

Uncertain times? Here's how to control risk

The amount of trust your relationship deserves can only be judged by yourself. Knowledge of the financial position of your relationship is very valuable in this context. If you only have a handful of customers, you can easily gather this information yourself. But with larger numbers it is a lot harder. Because beware, the situation of (international) parent and sister companies also affects the financial position of your client. Such complexities make it difficult to assess the creditworthiness, especially if your customer group is large. That's why our database monitors it for you. Every time something changes in the creditworthiness of your relationship, you simply get a notification.

Complete and up-to-date financial insight

The Altares Dun & Bradstreet database is the most complete business database available, filled with organizational and financial data that is carefully maintained. By using this data intelligently, you can spot opportunities, avoid risks and make better decisions. This enables you to make an up-to-date and well-founded assessment of the financial risk of your intended or current relationship. We give you insight into the current financial position, but also offer four practical indicators that help you to put this data into perspective:

1. Rating Risk Factor

A score of creditworthiness on a scale of 1 to 4. Where 1 indicates that the company in question is financially very stable and there is only a minimal chance that it will go bankrupt in the next 12 months. On the contrary, value 4 indicates that the financial health is not at its best and the probability of bankruptcy is high. These scores are continuously updated, but you will only receive a notification at the agreed moments. If a score is adjusted downwards, then you know that your relationship will have a harder time paying the bills.

2. Dun & Bradstreet bankruptcy score

A refinement of the rating. On a scale of 1 to 100, this score indicates how big the risk of bankruptcy is and puts it in perspective of other organizations. A score of 75 means that the company concerned is better off than 74 percent of all companies in the Netherlands, and 25 percent are doing even better. This score is also compared to the average score of companies in the sector. So you know whether your relationship is a relatively stable partner, or relatively risky.

3. Dun & Bradstreet Paydex®

A payment index on a scale of 0 to 100. A score of 80 or higher indicates that the company in question usually pays its bills on time and unchanged or better than 12 months ago. A score lower than 80 indicates that payment behavior is out of term or extra delayed, for example, if normally payments are always three days late and now suddenly seven days. That makes this Paydex® a powerful indicator of a changed liquidity position. The score is calculated based on actual invoice data and actual payment behavior in the market.

4. Credit Limit

Independent and up-to-date advice from risk experts as to the amount up to which it is responsible to do business with a particular organization. For example, whether you can safely have up to € 18,000 in outstanding accounts with your partner or whether a maximum of € 5,000 is justified. This limit is calculated based on the financial position of individual organizations. So you know which cooperation is recommended, without taking too much risk.

Very valuable

Set an alert on the indicators you consider important, and every time something changes you get a notification. Next you can take a closer look at the current development and reassess your business relation, if necessary you can reconsider the payment agreement. This allows you to easily manage the risk, whether you have 7 or 673 business relations. You can also properly assess a potential business partner in this way, before engaging with them.

Very affordable

Everyone has access to these insights, it is well affordable even for SMEs. You only pay for the data you use. Your costs depend on how many organizations you want to monitor and how many reports you want to view. Many SMEs are set for about € 2,500 per year. If you save yourself an unpaid invoice, the costs are already covered.

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Arjan Bakx

Productmanager Credit Risk

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Credit Monitoring

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A credit check at customer acceptance is valuable, but also immediately outdated. The real credit risk actually begins after you have accepted a customer. accepted. The solution: monitor the financial health of your customers in real time.

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