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How Data Improves Credit Control Procedures

Jul 11, 2018 Red Flag Alert Updated On: October 11, 2023
How Data Improves Credit Control Procedures

Relevant, accurate data is critical to effective credit control decision-making. However it’s getting tougher to find the relevant data to deliver effective credit control procedures. The financial status of a stable business can deteriorate rapidly – with Brexit, interest rate hikes, changes in consumer habits and business rate changes, there are many risks. There has been a recent increase in casualties among pubs, casual dining and the high street generally.

Furthermore, the abridged reporting standards of FRS 105 are making it harder to understand micro-entity financials. Obtaining accurate business information – and evaluating it effectively – is the only sensible way to manage risk in a situation where half a million UK businesses entered 2018 in severe financial stress.

Credit Control Decisions Are Hard

Developing robust credit control procedures is a challenge, especially when assessing customers on the borderline of creditworthiness or where there is a lack of information.

Speed and user experience are important selling points for many online businesses. The business loan provider Funding Circle boasts it can give a decision in “as little as 5 hours” – businesses now expect things to happen quickly and they also expect the minimum of fuss. This leaves credit control departments under pressure to make faster and faster decisions.

This fast moving environment means that when a business’s financial circumstances change, a credit control team may be completely unaware. As we’ve seen with a raft of recent high street administrations, a business can look relatively secure and solvent at the end of year accounts but descend quickly into insolvency.

Red Flag Alert Helps Navigate These Troubled Waters

Red Flag Alert provides an up-to-date financial health rating on every business in the UK. These ratings are updated daily by the emergence of new information and the watchful eye of credit analysts who are scouring a large number of sources for clues to changes in a business’s financial health.

Red Flag Alert is the tool of choice for risk-averse credit managers who want all available information before making a decision. The Red Flag Alert solution provides:

  • A detailed financial health rating using current data from ten leading owners; the Red Flag Alert update has 50,000 changes to business information every single day. Updated information includes the latest financial data, director information, London Stock Exchange statements, interim financial results, ratio analysis, location, size and preferential creditors.
  • More information to carefully assess borderline cases. The database’s unique ‘red flag’ system provides a clear indication of a business’s risk level so you can make informed decisions on granting credit terms.
  • Monitoring alerts that spot customers which are struggling financially; these alerts can be emailed or integrated into your CRM using an API. This allows credit control teams to continually monitor ledgers to spot emerging risks.
  • Access to the entire data set in an easy-to-use format which allows credit managers to quickly drill into the financial data behind the ratings to help them make nuanced credit decisions.

Red Flag Alert has delivered a tool that enables credit control teams to now rely on data to power their decision-making process. You can read more about how Red Flag Alert supports stringent credit control checks in our company credit check guide.

The Human Touch

Red Flag Alert employs a team of elite analysts who review Red Flag Alert’s scores in real time to make sure no information has slipped through the net. The combination of algorithms developed over decades and additional checks and balances gives Red Flag Alert’s credit scores a unique level of detail and insight.

Often Red Flag Alert will issue a red flag warning when all other leading agencies are listing a business as secure. This happens because Red Flag Alert considers more factors and analyses them in more detail, providing the most accurate picture.

The Solution of Choice for Prudent Credit Control Managers

Using Red Flag Alert, you will provide a more cautious approach than other agencies and this is perfect if your primary concern is managing risk and setting credit limits that are safe. Red Flag Alert will flag up problems accurately and then provide an easy platform so you can look under the hood of a business.

Many of our users have a policy where a Red Flag Alert Rating always equates to a certain credit decision. Other users value the ability to drill into the data – particularly if they are dealing with a complex case or critical client. This flexibility means we are used by both FTSE 100 companies and SMEs.

Free Consultation

For a free consultation with one of our team, please contact us here. In this consultation we can: 

   1.      Offer advice on your current credit control process.

   2.      Explain how Red Flag Alert can add value to your process.

   3.      Answer any questions you have on data-driven credit control.

   4.      Provide a free trial of Red Flag Alert.

Published by Red Flag Alert July 11, 2018

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