One of the main goals of a credit application is to establish a relationship with a new customer and learn as much about the prospective client before entering a business and financial relationship.
But the end game is really to prevent delinquent payments, bad debt and financial loss. So that means not only requiring a credit application when a company signs on as a new customer, but also periodically checking their credit and updating the information you have on them to ensure their creditworthiness.
Simply put, an accurate and completed up-to-date credit application is one of the best ways to minimize risk. A new application should be signed annually. Using a digital credit application service like Nectarine Credit will allow you to easily request new applications.
In addition to periodic checks, there are also a handful of events in a business lifecycle that could trigger a significant change in a company’s creditworthiness -- or at least require you to have them fill out another credit application or monitor their credit more closely.
Nectarine Credit offers credit application management software for both buyers and sellers. It's free to get started. In addition to the actual credit application -- and offering the ability to have customers sign a new application -- Nectarine Credit users can monitor their customers for changes in vendor payments. An updated application will give you insight into more recent bank balances and cash flow.
While having your customer fill out an application when a significant event hits, monitoring is more timely and in many ways more relevant. A signed follow-up application can come after you've noticed a change in vendor payments or bank balances.
If you'd like to see a demo of Nectarine Credit's platform, contact us here.