The Better Payment Practice Group launches diagnostic questionnaire to help identify risky customers

The Better Payment Practice Group (BPPG) has added a new diagnostic questionnaire to this website, www.payontime.co.uk, to help determine if a company’s customers are suffering financially and also give advice on how to protect cash flow and recover costs when a customer’s business fails.

With every business’s survival depending on the ability of its customers to pay its invoices, without a sufficient credit management policy in place, success can be jeopardised. According to a survey by the Credit Management Research Centre, which is a member of the BPPG, only 38% of companies withhold supplies from slow-paying customers, and on average those only begin to do so 33 days after the due date. Knowing how to react at each stage of a customer’s business failure and insolvency enables a supplier to handle the business relationship carefully and avoid detrimental effects on its cash flow.

Stephen Lewis of the Credit Services Association and member of the BPPG commented: “Insolvency, bankruptcy, receivership, liquidation and voluntary administration can be complex and stressful to all parties involved. By recognising the early warning signs of a financially troubled customer, suppliers can take steps such as reviewing credit terms in order to minimise the effects of possible default and insolvency. Armed with this information, businesses are in a better position to weigh up the potential risks of trading with their customers.”

The BPPG’s questionnaire can be found by clicking here.

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