9 June, 2023

6 minutes of reading

Written by: Alice Casagrande

How to Reduce Credit Risk Thanks to Your Clients' Credit Assessment


Offering digital and flexible payment options is the key to increasing sales, retaining customers and supporting suppliers. But how can you do this without incurring the risk of default? The best way is to rely on safe and accurate financial tools that help you better understand your B2B clients, just like Opyn Pay Later does. Let's find out how.


What is Credit Risk?

When a bank grants a loan to a company or when a seller offers a payment extension to a buyer, they become creditors to their clients. As such, it's in their best interest to understand if these clients will be able to meet their debt. The risk that they won't is called credit or default risk, and it is influenced by many variables, some external, related to the economic situation, and others internal and specific, related to the debtor.

Trade credit is a very common practice, especially among companies that have other businesses as clients. Therefore, every B2B company, regardless of its size or sector, should be aware of the importance of proper credit risk management. Accumulating credits that will be paid late or are even uncollectible can lead to cash imbalances and affect the company's ability to meet its own debts to third parties.

Today, this aspect is particularly relevant given the uncertain macroeconomic situation and the increase in inflation, which negatively impact the financial stability of companies.

Good credit risk management allows sellers greater collection security and, consequently, better growth and development capacity.

The Benefits of Credit Assessment to Reduce Credit Risk

Offering digital and flexible payment options can be the key to increasing sales, retaining customers and supporting suppliers. However, the main fear for sellers remains that business buyers will not meet deadlines or even not pay the installments. This is especially true in B2B, where average receipts are much higher.

Performing a creditworthiness assessment of the client is therefore essential to prevent unpleasant mishaps. However, conducting this type of analysis independently is complicated and time-consuming. In fact, many variables come into play in calculating risk and it is not easy for a company to have a complete and correct view of another company's financial status.

To get reliable feedback quickly, it's best to rely on an end-to-end service like Opyn Pay Later, which allows sellers to offer installment payments flexibly and securely to their clients, taking care of everything from credit analysis to debt recovery and potential defaults.

Opyn Pay Later allows merchants to maximize and simplify sales, improve cash flow due to more timely payments, reduce administrative costs and default risks. At the same time, it offers buyers the opportunity to pay in installments through an innovative, automatic, and 100% digital payment service.

How does Opyn's Credit Assessment Work?

To minimize the risk of default and make quick and safe decisions, it's important to rely on competent experts.

At Opyn, we have been guaranteeing the highest standards of analysis and performance to our clients and institutional partners for over 10 years through our proprietary technology based on AI and machine learning. With Opyn Pay Later, we offer an instant check on the buyer's reliability: over the years, we have already assessed the creditworthiness of 50,000 companies.

But how does our assessment work in practice?

When the merchant registers the buyer on Opyn Pay Later, they enter the company's VAT number. From there, the platform captures hundreds of data from internal and external sources and processes it through its own algorithms developed from the experience of analyzing over 15 billion credits in the last 10 years.

By cross-referencing this information, it is possible to immediately determine if the company is financially reliable and thus has the characteristics to access Opyn Pay Later. But it doesn't stop there: the platform provides a precise picture of the buyer's financial situation. Specifically, it analyzes its "numbers", conducts anti-fraud checks on its phone number, email address, IP, verifies its web reputation, and much more.

All of this happens in a matter of seconds, after which the merchant receives feedback on the buyer's creditworthiness.

By entrusting us with the credit risk analysis of your clients, you will have access to real-time assessments and significantly reduce exposure to fraud and losses. In this way, you can make valid decisions quickly and have more time to focus on growing your business.

This is also confirmed by our client Gianmaria Romano, CEO at I-Tech, a company specializing in high-quality refurbished tech products, who states:

"With Opyn Pay Later, I feel more at ease when proposing flexible payments, especially to new clients. Opyn Pay Later performs a quick credit check on buyers and, if the outcome is positive, it allows me to send the payment link in an instant. In this way, I am more peace of mind and clients pay comfortably."

A good credit risk management policy requires flexible and accurate financial tools that help you better understand the credit worthness of clients, thus minimizing defaults. Being aware of a client's solvency level is a fundamental element in building strong business relationships.

Reduce your credit risk and grow your business by offering better payment terms and flexible installments to your clients online and offline. Discover Opyn Pay Later!