Assessing risks and minimizing payment defaults
E-commerce is booming. Despite double-digit growth rates, online retailers face strong competitive pressure. Those who wish to set themselves apart from the competition, not only need clever ideas but also ongoing investments in optimizing the customer experience. In the digital service example, this includes new technologies like chat bots or voice assistants that support the shopping process. To implement these innovations, it takes capital. But this is often tied up in outstanding receivables. If you make some important adjustments, you can minimize bad debt losses with targeted risk and receivables management, financially protecting your growth strategy.
In my experience, a key element of a good e-commerce growth strategy is intelligently combining risk management, accounting services and the sale of receivables. After all, customers occasionally enter payment default with outstanding claims. The goal must be to minimize bad debt losses.
Based on conversations with our customers, I understand just how important good risk management is in e-commerce. Here, online merchants naturally check their customers’ creditworthiness before a purchase is made. In this way, they can take various measures depending on the risk, such as identity checks. This makes the payment behavior of customers more predictable and minimizes both the number of fraud cases and payment defaults.
Moreover, valuable data can be obtained from each step in the process, in order to calculate a fair purchase price for receivables. This guarantees transparent and attractive pricing when selling receivables. And, on the basis of your risk decision during the ordering process it is even possible to jointly determine the purchase price of open receivables for different credit rating classes in advance.