Creditinfo Lietuva advertisement: Publicity disciplines: how businesses can avoid insolvent clients

 

"Lithuanian businesses still do not have the habit of reporting debtors and try to resolve unpleasant situations quietly. Practice shows that publicity not only disciplines those who do not fulfill their financial obligations on time, but also protects potential creditors from problematic clients.

 

For 25 years, the credit bureau Creditinfo Lietuva has been administering a system that conveniently provides systematized, automatically updated data that is important for assessing the client's credit risk. The information is based not only on information from state registers, Sodra, the State Tax Inspectorate (STI), etc., but also on data provided by members of the credit bureau on the debts of companies or individuals.

 

"The system performs two functions: it provides creditworthiness information about an existing or potential client (legal entity or individual) and provides an opportunity to search for debts without additional costs, by exchanging information. The credit bureau is used by all banks registered in Lithuania, telecommunications, leasing, utilities, fuel, as well as industrial, insurance and other business sectors. All these companies not only perform checks in the system, but also enter information about their insolvent clients into the system, thus limiting the ability of their debtors to obtain credit from other members of the credit bureau.

 

The uniqueness and strength of our system is that everything is based on the "exchange" principle. This means that in order to obtain data about the debts of existing or potential business partners, you should also provide it to the credit bureau system. So if you report a debtor to a credit bureau, it is likely that he (the debtor) will not receive payment deferrals from the credit bureau members or will receive them, but on worse terms,” explains Marius Labeikis, Head of Business Solutions.

 

Financial discipline is a sign of a strong and sustainable business. However, not all companies carefully manage financial obligations, so it is valuable for businesses to know how to assess the financial health of potential partners or customers in advance and thus avoid problems in the future.

 

“We constantly analyze the information in state registers, but some official data is unfortunately delayed due to objective reasons. For example, companies must submit financial statements annually by May 31. Therefore, at present, we can largely rely only on 2023 financial data. Therefore, in order to assess the financial discipline of a company, information about debts is critically important, because only in this way can the real situation be analyzed promptly and conclusions be presented to other members of the credit bureau,” – why is it important to share information about debtors, emphasizes M. Labeikis.

 

Double benefit for business

 

Reliable partners and customers who fulfill their obligations on time ensure the smooth operation of each company, provide an opportunity to plan future investments and business development. Although in cooperation agreements, businesses clearly indicate the terms within which it is necessary to pay for goods or services, M. Labeikis points out that companies still tolerate delayed bill payments and are in no hurry to report debtors.

 

“It is often forgotten that while only the creditor and the debtor know about the debt, it is the creditor who experiences more inconvenience, because he does not receive the planned income. Meanwhile, the debtor can continue to borrow, negotiate better credit terms or payment deferrals, and sometimes solve his working capital problems in this way. In Lithuania, it is still customary to tolerate late payments, although it is agreed that financial obligations will be covered within the specified time. Thus, publicity can be a way to discipline debtors and allow for smoother business planning,” explains M. Labeikis, explaining why it is useful for companies to inform about debtors.

 

When businesses get used to publicly sharing information about companies that do not pay their bills on time, then debtors will have fewer opportunities to continue such financial practices. At the same time, such responsible behavior of companies will create a tradition of transparent and responsible business in Lithuania.

 

Convenient and easy to use

 

Information about debtors can be provided by all companies that have signed agreements with the credit bureau “Creditinfo Lietuva”. It is important to know that when submitting data on debts to the system, companies assume full responsibility for the accuracy of the data provided and their timely updating.

 

“When the debtor has paid or partially paid off the debt, the credit bureau member should update the debt information. In the credit bureau system, the debt status will change from unpaid to paid or partially paid off,” the interviewee specifies.

 

It is important to know that the creditworthiness assessment and ratings are influenced by the payment history of the last 2 years (from the date of payment of the debt).

 

“Businesses often avoid reporting debtors because they believe that they could damage the relationship.

 

In order to avoid misunderstandings, before informing Creditinfo Lietuva about the debt, we recommend that you inform the debtor that you are a member of the credit bureau and that, if debtor does not fulfill his financial obligations on time, you will transfer the data to us. This way, you will maintain professional relations with the client, because you will inform them about your actions in advance and give the debtor time to cover their financial obligations," says M. Labeikis.

 

Guarantee - certificate

 

Creditinfo Lietuva has been conducting company certification for 14 years. After businesses submit their financial statements, a careful selection of companies is carried out according to the established certification rules and dozens of various financial and non-financial indicators are checked, which substantiate the company's financial stability, responsible fulfillment of obligations, and good reputation.

 

"Strongest in Lithuania" is perhaps the most famous "Creditinfo Lietuva" certificate, which is awarded to companies that meet the criteria of a reliable business partner. M. Labeikis emphasizes that companies assessed with this certificate have no debts at the time of certification and are fulfilling their financial obligations on time, and are likely to fulfill them in the coming years (the delay rating predicts the event for a year in advance).

 

"The data of certified companies is not only updated daily, but also checked against the certification criteria, which means that we closely monitor how the company fulfills its financial obligations. If the situation changes, for example, the company does not pay its bills to customers on time, we immediately suspend the certificate. So as long as we see the sign "Strongest in Lithuania" next to the company's name, we can be sure that this business adheres to financial discipline," summarizes M. Labeikis."

 

TO CHECK OUT A SPECIFIC COMPANY, PURCHASE A REPORT AND UNLOCK DATA ON THE WEBSITE LISTED BELOW:

https://lt.creditinfo.com/stipriausios-lietuvoje-imones-iii/