Jari’s Whatsapp group switched to realtime risk analytics
In a perfect world, customers pay within the agreed payment time. In the real world, however, only the realized payment time matters. riskrate tells when your customer will pay.

Jari looked at the monthly report and he rubbed his eyes, as October sales again, showed some awesome growth. His book-keeper posted an email, November salaries could be now accepted for payment. Jari looked at the bank account: after paying his people's salary, the bank account would again reach the cash limit. His monthly report looks positive, but the ongoing cash flow problem really confuses him.
After a quick calculation, it was clear to Jari that the monthly P&L based report could be positive, but that the cash & bank account is driven by the actual payment time of the customers.

The German economy has shown signs of recession and it keeps Jari awake. The payment behavior of a new customer is always a little stressful, even if their credit rating is okay. Jari has to keep a cash buffer and finger on the pulse of his bank account because the cash flow forecast available is based on a perfect world model where customers are expected to pay on the due date.
“His overall picture of customer payment behavior is based on random messages within a Whatsapp group of his entrepreneur friends”
Purchase invoices & outgoing cash are in Jari’s own hands and he, therefore, knows exactly when they will be paid. Jari’s problem is predicting sales cash flow and customer payment behavior. His overall picture of customer payment behavior is based on random messages within a Whatsapp group of his entrepreneur friends. It’s time to try real-time risk analysis integrated with his accounting software, based on the company database and real-time data.

How does real-time risk & payment data help Jari?
In a perfect world, customers always pay within the agreed payment time. However, in practice, the payment behavior of customers varies a lot and paying late is too easy. Still, most cash forecasts are based on the perfect world model.

If we monitor the (dual) performance of the customer only for ourselves, the weak signals and the overall picture of the customer’s payment behavior is lost. By real-time data, Jari can monitor customer payment behavior also to the others.
In some cases, late payments escalate into payment defaults, which are registered when payment is roughly two months late. A payment default is a signal on a negative outcome and, on the other hand, only the tip of the iceberg. By real-time data, Jari can monitor customer payment behavior in both positive and negative directions.

This data helps Jari to choose the customers with whom to make business and to react what to do to speed up DSO, days of sales invoices outstanding.
Like for instance, if a customer’s payment behavior shows signs of weakening, Jari can easily try proactive credit collection, reminding the customer well in advance of the invoice’s due date. Real-time information also gives Jari the confidence to turn to an invoice financier, if needed.
Päivi is an entrepreneur, founder of riskrate. riskrate tells when your customer will pay.

