The internet is a great way of cutting business costs and offering fast, convenient business-to-business transactions.
But business information company Equifax is warning firms that losing face-to-face contact with customers could make it difficult to spot the early signs of financial trouble.
It says that as business failures continue to rise, organisations need to ensure they maintain careful monitoring of customers, especially when operating online.
“Trading over the internet, for direct transactions or order processing, has very low margins, offering a cost-effective alternative to the traditional commercial environment,” said Nic Beishon, head of commercial solutions for Equifax.
“Many businesses are embracing the benefits of the internet. However, driving sales online may make firms vulnerable to issues such as corporate identity and credit card fraud. In addition, e-transactions reduce the need for personal contact, making it harder to sense when a customer might be going through difficult times.
“We advise businesses to make sure they put stringent processes in place to help them reduce risks and protect themselves from bad debt. Conducting credit checks on new customers is essential and we also urge businesses to use ongoing monitoring to alert them to changes in a customer’s financial status.”
The Equifax Portfolio Monitoring Service offers an online system designed to help businesses stay up to date with the changes affecting their customers’ financial status. An email alert system allows firms to take control and effectively manage their customer base by keeping an eye on changes in company directors, credit limits, CCJs or registered address.