Companies use Red Flag Alert’s up-to-date and in-depth data to monitor companies they deal with, helping them manage risk and grow their business. When applied consistently, taking proactive steps to monitor businesses can have a real impact on your organisation’s financial performance.
In this article, we’ll look at some of the ways monitoring with Red Flag Alert can add huge value to your business.
Monitoring as an Enabler of Growth
Business monitoring can reveal new sales prospects, as well as opportunities within your existing client base. Here’s how it works.
If one of your existing clients has a significant change in their circumstances — such as an increase in revenue, expansion into a new market, or a reduction in profitability — they are likely to need help to deal with this change. If you notice these changes early on, you can offer your services to help as soon as they might need them.
If a company expands into a new area, it could offer an opportunity for an energy broker to direct the client towards a new plan. Likewise, if a company’s sales are increasing, they may require more products from their manufacturer.
On the other hand, if you notice a company is struggling with liquidity, they may need products to help free up cash, such as invoice financing. The key is that whatever the change, knowing about it early on can help your business spot opportunities you may not otherwise have seen.
Monitoring can also help sales teams discover potential customers who may be a good fit for their company’s product or service.
Sales teams powered by Red Flag Alert’s data can filter through all the businesses in the UK to reveal new targets. For example, if you sell to the construction sector in a certain area, a good strategy could be to set up an alert whenever a new company enters the local market.
Alternatively, your sales team could use the data to search for companies that are more established but growing. Like new companies, they could be open to buying from a new supplier.
Once you have discovered these new targets, you can add them to your company’s sales list for further prospecting. This kind of targeted lead generation can help your sales team become more efficient.
Monitoring to Help Avoid Risk
Identifying risk quickly can help businesses take action to reduce their exposure to loss. Monitoring existing clients — and the clients they deal with — is one way for companies to ensure they know about any potential dangers as soon as they appear on the horizon.
Monitoring will alert you if the financial health of one of your clients is deteriorating. This will allow you to put provisions in place to ensure your risk stays low. Red Flag Alert uses up-to-date financial data and a flag rating system to clearly show if a company is in distress and — crucially — the level of that distress.
Key to avoiding risk with a struggling client could be tightening your terms of sale. This could include asking for shorter payment terms (or even upfront payment) and Retention of Title clauses may be useful if a client is unable to pay.
Additionally, if your business is overly reliant on a company that is struggling financially, you could begin to reduce risk by searching for new clients or building cash reserves to protect against bad debt or a loss in sales.
We have an in-depth guide about how businesses can manage credit risk that you can read here.
Clients Doing Well
Much risk comes from clients in financial trouble. However, depending on the service your business offers, a successful client could also be a cause for concern. For example, improved liquidity could be a problem for businesses that offer short-term financial support.
Alternatively, companies seeing an increase in sales may find they want to move to larger premises. This could be bad news for an office rental agency that concentrates on the low-cost end of the market. Knowing about these possibilities early on will help you prepare.
Failures Causing a Domino Effect
Monitoring the businesses your clients deal with — as well as the clients themselves — can help you spot risk early. When a large company fails, suppliers and companies that rely on the business are also likely to struggle. This can set off a domino effect of business failures as companies going into liquidation struggle to pay their creditors.
Spotting when one of your clients may be at risk due to a liquidation of one of their clients further up the supply chain could allow your company to take steps early on to reduce risk.
Monitoring Gives All Departments Access to the Most Relevant Information
Monitoring allows different departments to share opportunities based on data with other departments. For example, marketing could spot an opportunity — such as a client opening a new office — and pass on this information to relevant people in sales.
Likewise those in finance could alert account managers that a business is shrinking, which could cause the account to become less valuable.
How Red Flag Alert Can Help
Organisations that use Red Flag Alert for monitoring can set up monitoring alerts to inform them of changes to businesses they deal with. These reports can be delivered to key people within the company so they can make informed decisions.
Red Flag Alert provides data on every business in the UK. The information is updated in real-time, meaning around 50,000 updates every day and new information as soon as it becomes available.
Each of these businesses is also given a financial health rating that considers industry-specific information and these ratings are reviewed by expert credit analysts.
This early warning system will allow you to relax, confident in the knowledge you will have key updates as soon as information becomes available.
To see how Red Flag Alert's monitoring tool can protect your business, click here for a free trial.