The payer rating predicts payment behaviour and is generated using a machine learning model.
Last updated: August 23, 2024
The payer rating is a valuable tool that assesses your customers' payment habits. It allows you to manage your receivables effectively by assigning a score to each customer, indicating their performance in meeting payment obligations.
Three distinct levels:
- Bad: Customers with a history of inconsistent or delayed payments fall into this category.
- Average: Represents customers with generally satisfactory payment habits but with occasional delays.
- Good: Reserved for customers who consistently pay on time or ahead of schedule.
Hover over the payer rating for any customer to reveal a percentage, providing more detailed insight for comparing and understanding your customers' scores when necessary.
Key benefits:
- Filtering: Easily filter customers based on their payer rating to streamline your collections process.
- Schedule assignment: Assign customers to different follow-up schedules based on their rating for targeted communication.
- Export inclusion: Include payer ratings in your exports for comprehensive reporting and analysis.
The payer rating can help you:
- Compare your customers (who are the best and worst payers).
- See who your worst debtors are and focus on them.
- Group customers based on ratings.
- Choose to create different schedules using your customers' payer rating so that you can adapt the frequency and method of your chase.
- Understand your risk (e.g., how many bad payers you have, and how many invoices are at risk of being paid late).
- Produce periodical reports based on customer ratings to give insights into the percentages of good/bad payers in the total amount of receivables.
- Adapt credit limits (e.g. when your customers become bad payers, you may consider reducing their credit limit to decrease the risk to your business).
Payer ratings calculations
The payer rating considers the customer's previous payment behaviour and predicts how likely the customer is to make payments on time. The customer is given a score, which is transferred into a generalised rating: Good, Average, or Bad.
The calculation takes into consideration the following:
- Day of week of due date.
- Week of year of due date.
- Year of due date.
- The total difference in days between the due date and the paid date (Days delay).
- Days delay for the previous invoice.
- Days delay moving average (windows of 2) of earlier invoices.
- Std. deviation of days delay for the last two invoices.
- Total value of the invoice.
- Total value of the previous invoice.
- Total value moving average (windows of 2) of earlier invoices.
- Std. deviation of the total for the last two invoices.
- Invoice is paid late (1 if true, 0 if false).
- The previous invoice is paid late (1 if true, 0 if false).
- Total number of (previous) invoices paid late.