Eliminating bad debt with Augmented Intelligence

February 28, 2019

Believe me, there are many challenges that come with running a start-up. Fundraising, scaling, recruiting the best people, addressing customer concerns, building and developing a great product – all of this and more have arisen at various stages during the Squirro journey.

Perhaps the one issue that I have yet to encounter in a major way, is bad debt. I have been lucky in that, but that’s not to suggest that it doesn’t exist. Bad debt and credit risk are a real blight on business growth for many organizations. The cash-flow issues that come from bad debt can lead to untold problems, including an inability to pay suppliers or employees, difficulties in scaling and investing for the future.

Research at the end of 2018 by Atradius found that across businesses in Western Europe, the proportion of invoices past their due date stands at 41.8%. The average days sales outstanding (DSO) ratio was 44 days in 2018, a long time to wait for money that is owed to you.

This is why we are launching the Squirro Credit Risk application. It’s the latest in our suite of augmented intelligence-based applications and is used by finance teams, account handlers and more, to protect their businesses against credit risk and bad debt.

A lack of customer credit checking

A major factor behind bad debt and credit risk is that many organizations simply do not credit check their customers. Those that do credit check usually only do so during the customer onboarding process and then possibly on an annual basis.

Credit risk scores are usually based on credit management tools, but this looks mostly at numeric data, but credit risk can be determined by many other factors and also changes constantly. If your customer were to lose one of its major customers, that would have an impact. A change in the senior management team would have an impact and a poor earnings announcement certainly would. The truth is that there are many factors and events that can change credit risk and to understand credit risk and the impact it can have on a business, finance teams need to be on top of all such events.

To make things even more complicated, most the data relating to credit risk – news reports, earnings calls, customer social media updates, call notes or hold within premium external data – is unstructured, and therefore almost impossible for an organization to manage.

Enter Squirro Credit Risk

So Squirro Credit Risk addresses all these issues. It offers users a far greater understanding of credit risk across an entire client portfolio and enables much smarter and more informed decision making related to credit risk.

Like other applications in our suite, Squirro Credit Risk uses augmented intelligence, adding structure to unstructured data to enable greater insight. It automatically notifies users when such an event or catalyst takes place, either via email or through the fully 360-degree client risk cockpit.

This means that users know in real-time exactly when (and how) a customer’s credit risk changes and they can then make credit risk decisions based on that status. It’s an application that is hugely empowering for finance teams and can play a major role in addressing bad debt and mitigating credit risk.

To request a demo of Squirro Credit Risk, please click here.