Learn why small businesses hungry for sales growth must know the full story of creditworthiness before accepting new customers on payment terms
What’s happening: Small B2B businesses eager for sales growth are taking on new customers under credit terms without proper financial risk assessment.
Why this matters: Automated assessment tools now consolidate scattered information, making protection accessible to operations that previously couldn’t afford thorough vetting.
The drive for sales growth creates blind spots in many small businesses. Lynne Walton, Founder and CEO of Access Intell, identifies one of the most costly: extending credit without proper assessment.
“Small businesses are often hungry and eager for sales,” Walton explains. “In the quest for sales growth, a common pitfall of B2B businesses is taking on a new customer under credit terms without assessing the financial risk.”
The consequences extend beyond individual transactions. Late payment through to customer insolvency can devastate cashflow for operations with limited reserves.
“This leaves the business open to financial loss, from late payment through to customer insolvency,” Walton notes. “The potential impact on cashflow for a small business is huge.”
The solution requires knowing customer creditworthiness before extending terms. But information fragmentation creates barriers for time-poor business owners.
“To combat this, it’s incredibly important to know the creditworthiness of your potential customer,” Walton says. “Whilst there is a lot of information out there from multiple sources, small businesses don’t have the time to sift through it looking for red flags.”
This challenge aligns with broader research on small business tax and financial obligations, where the ATO has intensified focus on businesses with complex obligations.
Automation addresses the time constraint. Tools like Access Intell software consolidate scattered information into actionable intelligence.
“Tools to automate the credit assessment and decisioning process, like the Access Intell software, reduce risk and create a fast, easy process,” Walton explains. “All the creditworthiness information is collated into one place, such as ASIC updates, court actions, ATO business tax debt defaults, credit scores and more.”
The consolidation creates efficiency. Rather than manually checking multiple sources, business owners access comprehensive risk profiles instantly.
Customisation enables businesses to align decisions with their specific risk tolerance.
“You can even customise a decision workflow, to approve or decline a customer, based on your risk appetite,” Walton notes.
But technology only enables better decisions. The fundamental requirement remains unchanged: businesses must actually assess credit risk before extending terms.
“The most important thing is to have that credit assessment information in the first place, to really know the full story of the sale,” Walton concludes.
For B2B businesses eager to grow sales, the temptation to say yes to every customer remains strong. But understanding whether that customer will actually pay transforms a potential sale into reliable revenue or exposes it as a costly liability. As research shows, understanding tax and financial obligations becomes increasingly critical as businesses scale.
The hunger for growth shouldn’t override the need for due diligence.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
