what does it mean?
Every time a company decides to sell to another company with a payment term, there is always the risk not to be paid. A credit risk management policy mitigates this risk.
In the past, these services were very expensive and only used by banks and financial institutions. They were gathering (manually or automatically) available business information which was assessed by financial analysts based on a defined scoring model.
Currently, due to digitalisation, the costs decreased and credit risk management tools became affordable to commercial companies as well.
We propose the following process every business can implement immediately to avoid bad debts: