A new service called CreditorWatch has been launched to warn start-ups from doing business with shonky operators who carry poor credit ratings.
CreditorWatch allows small businesses to expose clients who have failed to pay their invoices on time, and monitor current and potential clients’ credit ratings.
Spokesperson Patrick Coghlan says there are three phases to the CreditorWatch concept.
“You can monitor your clients, you can expose bad debtors, and you can use the [CreditorWatch] logo on your invoices as a preventative measure,” he says.
Users essentially share information on a name-and-shame basis. They create an account by submitting their billing and contact information.
By entering the ABN or name of a business, users will be able to view any defaults registered against them.
By adding the business to their WatchList, they will be alerted via email of any future defaults registered against the company they are monitoring.
Registering a default against a business can be done once a debt is 30 days overdue and requires the user to upload a document such as a statement, final notice or legal letter.
Other CreditorWatch users will then be able to view this default and document, and receive an email alerting them to this information.
Coghlan says CreditorWatch is a valuable form of business insurance, and start-ups have an advantage because they can sign up in advance.
“We see ourselves first and foremost as a prevention [measure] rather than a cure,” he says.
“If you do have an alert that comes through to you – warning you about a prospective or current client – [the monthly fee of] $24 could potentially save you $10,000.”
“We find small business owners want to be able to tell people [about bad debtors]. They’re angry they’re not going to get their money back so the next best thing is exposing the shonky operator.”
CreditorWatch was created by the managing director of a publishing company who was sick of dealing with advertisers who refused to pay their bills.
