Trade credit is a double-edged sword. It fosters strong buyer/vendor relationships and boosts sales, but it also exposes businesses to the risk of bad debt. Infamously, the Qingdao Port scandal saw companies use forged documents to secure loans against the same collateral, leading to significant financial losses for several Western banks.
Fraud and compliance risks are not exclusive to the financial sector. Enterprises face such challenges as well, as demonstrated by a recent case involving a Pune-based multinational subsidiary. This enterprise was found to have made accommodation payments to fictitious vendors, resulting in financial losses and regulatory scrutiny. One of the cases underscores how businesses can unknowingly fall victim to sophisticated fraud schemes that manipulate internal processes and controls. The issue revolved around fake vendor invoices and accommodation entries designed to divert funds, posing both financial and reputational risks. For businesses that operate on trust and complex supply chains, such incidents highlight the critical need for robust verification and compliance mechanisms. For more on this case read here.
The Solution: Secure Trade Credit with Business Verification APIs
Small and Medium enterprises (SMEs) often perceive KYC/KYB checks as tools exclusive to large corporates. However, KYC/KYB checks are not a luxury limited to large corporates. Modern Business Verification APIs assess buyer’s financial health instantly, enabling informed credit decisions. Here’s where Vayana’s Atlas Business Insights APIs make the difference, its bite-sized subscriptions integrate seamlessly with small-business-focused software.
Atlas: A Powerful Tool for Secure Trade Credit
- Real-time insights into buyer financials, credit history, and payment behaviour reduce the Risk of Bad Debt.
- Credit limits can be set based on buyer’s financial strength for Informed Credit Decisions.
- Ensures timely payments and avoids supply chain disruptions, Improving Cash Flow.
Builds trust by offering trade credit responsibly, building Stronger Buyer Relationships.
Advantage Atlas
Beyond traditional verification, Vayana’s Atlas Business Insights APIs integrate with existing systems for on-the-go verification. The flexibility of subscription options enables small businesses to affordably perform essential KYC/KYB checks, just like large corporates. By leveraging these APIs, businesses can confidently extend trade credit, fostering positive customer relationships and minimizing bad debts.
Ready to take control of your trade credit risk?
Visit the Atlas website today to learn more about our Business Insights APIs and how they can empower your business for a secure and profitable future.