Look up debt register - 5 benefits your business should know
A growing number of businesses have realized the importance of looking up their current and prospective customers in a debt register - and with good reason.
A debt register often reveals if your customers are in arrears with other companies - and this can provide the basis for a full assessment of your customer relationships.
In this post, we have gathered 5 reasons why you as a company should register your customers in a debt register.
1. A more complete picture of your customers
Traders want to be able to make fully informed and valid credit decisions.
In Denmark, fortunately, there are many good opportunities to investigate your business customers; insight into annual accounts, negative observations, bankruptcy relations, the opportunity to see who owns a company, etc. But if you deal mostly with private individuals, it has so far been more difficult to credit check the customer.
But with a lookup in a debt register, you will get a more detailed and comprehensive insight; do your customers owe money elsewhere. This doesn't necessarily mean that the customer will owe you money - but often they will - and you can take action: cash payment, shorter payment terms or maybe even prepayment?
2. A super weapon
In Denmark, we have almost unlimited possibilities to investigate our customers; public accounts, CVR and CPR records, the customer's address and phone number. These are all very good records when you want to assess a customer. But with a lookup in a debt register, you get yet another measurement parameter; a very effective one at that.
Because a search in a debt register will reveal whether a customer owes money to one or more companies - allowing you to make even better decisions and avoid bad payers.
3. Avoid bad payers - and the extra work (and expense) that comes with it
The overriding reason for using a debt register is, of course, to avoid bad payers - and thus to avoid not getting paid for your goods and services. But what most people don't realize is that bad payers will often have even more expenses than just non-payment for your products.
Bad payers often result in an additional cost for the company in terms of debt collection / recovery - and thus the extra work that is often also associated with bad payers.
In other words, consulting a debt register can ensure that your business gets paid for your goods - but also that you don't incur additional costs for debt collection.
4. Specific and more accurate payment policy
If a customer is on a debt register, there is a significantly higher risk that they will also default on a financial claim from you - such as an invoice payment, subscription or similar regular payment.
But it doesn't have to be that way.
Because with a look-up in a debt register, you can customize your payment policy to a much greater extent than without a look-up. With a look-up, you don't have to exclude a customer, but simply adapt your payment policy to the individual customer.
5. the cost is less than the profit
Of course, you are free to choose how many entries in the debt register you want - some companies choose to look up all customers, while some only look up new customers. It's entirely up to you and your payment policy and risk.
No matter how many searches you make, a search in a debt register will incur a cost.
However, our experience shows that this cost is outweighed many times over by the economic benefits of posting.
Try a free debt register search today
Would you like to see if consulting a debt register is for you?
We have developed the online platform, Qatchr, which helps traders assess the creditworthiness of private and business customers.
At Qatchr, we are currently offering you the opportunity to try us out and see if it's something for you - 100% free, 100% no obligation and 100% no commitment.
Create a free account today and see if it's for you - we're sure you won't be disappointed!
