Late payments are an increasingly worrying issue in today’s market as major corporate buyers have extended their payment terms to their smaller suppliers, which are then left to struggle to maintain cash flow.
Accounts receivable management firm Altus Global Trade Solutions has just introduced a mechanism that would allow suppliers to hold buyers accountable for their unpaid invoices, however. The company announced the Trade Data Reporting service, allowing its business customers to report the payment habits of its buyers to credit bureaus.
The service, reports said, means payment activity can be sent to Dun & Bradstreet, Experian and Equifax through an online portal provided by Altus at no charge to existing business users.
This service, Altus said, provides businesses leverage to suppliers, as customers are less likely to default on their outstanding invoices if they are aware that their activity will be reports. But the tool isn’t just beneficial to suppliers, the company added. “Everyone benefits from reporting payment history,” said Altus Executive VP of Business Development and Marketing Cliff Sanders. “Our goal is to strengthen the industry and reporting trade data is a great way to foster accountability and incentive in the marketplace.”
The new Trade Data Reporting service will also lead to fewer credit reference calls, while suppliers that submit their clients’ payment data will receive monthly reports from Experian to manage their cash flow and gain stronger insight into their operations.
According to Altus President Tom Brenan, the service also reduces the difficulty in reporting payment activity to all three major credit bureaus, which, he said, “can be a tedious and time-consuming task for any company.”
B2B service innovators have largely focused on solutions to tackle the late payments issue in recent years. Many are introducing new ways for suppliers to access working capital while invoices remain outstanding, leading to the rise in alternative business lenders, supply chain financers, and cash flow management software.