Help Your Business Get Paid On Time
The health of your small business can be inextricably linked to the financial stability of your suppliers and customers. If a vendor goes out of business, your ability to deliver a product can grind to a halt until another supplier is found. Likewise, customers that struggle to pay their bills can leave your balance sheet in a shambles. Monitoring the business credit scores and ratings of suppliers and customers is one of the best ways to help manage these risks. Tweet This The infographic below will help you understand Dun & Bradstreet’s scores and ratings.
A company’s PAYDEX score is calculated based on payment experiences reported by vendors and suppliers. Dun & Bradstreet may consider up to 875 such experiences, known as trade references**, to compute the score. A business’s PAYDEX score will fall between 1-100, with 100 representing the most responsible payment habits.
Delinquency Predictor Score
Another valuable piece of information for business owners is the Delinquency Predictor Score. With a risk class ranging from 1-5, with 5 representing the most risk, this score is intended to forecast how likely it is that a business will be severely delinquent in its payments, seek legal relief from creditors, or cease operations in the next 12 months. Dun & Bradstreet relies upon business information it regularly collects and receives in order to compute the Delinquency Predictor Score.
Financial Stress Score
The Financial Stress Score, or FSS, considers a business’s payment history, industry norms, and other details in order to predict how likely it is that a business will experience severe financial distress in the next 12 months. A company’s risk class will fall between 1-5, with 5 representing the highest level of financial risk.
Supplier Evaluation Risk Rating
A business’s Supplier Evaluation Risk Rating, commonly referred to as its SER, is an important indicator when evaluating both current and prospective vendors. Dun & Bradstreet uses statistical models and predictive data attributes in order to determine the likelihood that a supplier will seek relief from creditors or close down within the next 12 months. A business’s Supplier Evaluation Risk Rating will be between 1-9, with the higher number indicating the most risk.
How to Check a Business’s Credit Scores and Ratings
Dun & Bradstreet offers a suite of business credit tools that can help you monitor other companies’ business credit files. Staying informed about the financial health of your suppliers and customers can be a fundamental part of preparing your business for economic challenges outside of your control. Let Dun & Bradstreet help protect the business you’ve built.