What is Debtors Watch?

Debtors Watch ('DW') is India's first web based interactive portal that helps businesses of any form and size to report trade defaults, perform credit checks and monitor their customer's credit worthiness on an ongoing basis. Currently on CIBIL, only Banks, NBFC's, Credit Card Companies report the defaults of their borrowers; the data for which is used by other lending institutions for doing credit checks. DW would however, allow businesses to report trade defaults against any Company, Partnership Firm, Sole Proprietor or any Body Corporate.

DW is an online portal where one could register (for free) and report their bad debts giving one last chance to their Debtors to pay their dues. DW sends email and text reminders to Debtors on reporting of a Default against them to pay their dues. Through its uniquely designed features like mandatory uploading of documents in support of claim, PAN Validation of all Users, DW ensures no false defaults are reported on its platform and also provides opportunity to the Debtor to defend the claim made by the Reporter by documenting his/her response against the claim on DW platform.

Failure to meet the dues in stipulated time by the Debtor would lead to the facts of the above default being registered on DW portal which could be accessed by other users performing a credit check on this Debtor.

Apart from the user generated content, DW also gives access to its subscribers of the data aggregated by it from Ministry of Company Affairs (MCA) and courts and tribunals judgements. A Subscriber can add a list of their Customers to their watch list to monitor credit worthiness of the customer on an ongoing basis.

  • To recover old dues from customers by naming them on Debtors Watch.
  • Reminder alerts and email / messages to defaulter would force them to make payment, to avoid business loss from existing customers and vendors.
  • Alert others about defaulting customers and get alerted through defaults registered by others
  • To Check and monitor credit worthiness of your customers before engaging with them and on an ongoing basis (i.e. know the civil and criminal track records of your customers)
  • Access to Debt collection tools and services (i.e. Debtors Watch Logo on the invoices, trade credit insurance and others)
  • Access to 24x7 virtual credit manager at an extremely economical and affordable price

The Supreme Court, in a historic judgement on March 24, 2015, ruled in favour of the MouthShut.com to protect freedom of speech and expression on Internet and repealed Sec. 66A of the IT Rules of Information Technology Act of India, declaring it as unconstitutional and ordered reading down of various other sections of the IT Act. As a result, Internet users are free to post anything online and publishers cannot be forced to take down content without a court order. This applies to all user-generated content online.

On analysing reasons for failure of most of the start-ups in India, we identified 10 out of 100 start-ups die due to delayed recoveries or non-recoveries from their customers. All the above start-ups were a great business ideas, however, because their delayed cash flows didn't allow them to survive for long.

On review of Financial Statements of listed companies across various industries, we identified that the bad debts expense as a % of net profit was alarmingly high at 6-8%.

Sales is a Journey and cash is the Destination

We all know this, however for few journeys, the destination ends up with BAD DEBTS.

Bad debts not only result in loss of revenue from one customer, but also wipes off the profit earned from another. To simulate, In case a business has unpaid invoice of Rs. 1,00,000 and an operating margin of 10%, the Company would need to generate additional turnover of Rs. 10,00,000 in order to absorb the loss due to Rs 1,00,000 of unpaid invoice.

In today's competitive environment, “Credit” plays an important role in acquisition of new customers. However, there are no tools available to check the credit worthiness of the business, before offering them a credit. Often, sales team of businesses are given targets and pay-outs are linked to those targets. In order to achieve the same, most of the times, sales team does not bother to check the credit history of the potential customers leading to delayed or non-payments.

In the current scenario

  • How does it feel when the invoice is UNPAID? (Helpless)
  • What do you do to recover your BAD DEBTS? (Follow up for months, expensive court proceedings)
  • Do you check the credit worthiness of your customers before engaging with them? (Informally through close network and groups)

Debtors Watch is a team of young dynamic Chartered Accountants (CA's), Company Secretary (CS), MBA's and technocrats carrying a diversified professional experience of working with large MNC's, Investment Banks and business conglomerates across diversified industries.

The Founder of Debtors Watch is a Chartered Accountant by profession and with more than 12 Years of working experience across diversified industries in both public and private sectors.

"In my 12 years of professional experience, I have not come across any Company which has not recorded any Bad Debt. In fact, Companies have started estimating for Bad debts in their budgets! Through Debtors Watch my aim is to build a portal of credit information on every business of India which can be used by businesses to perform credit checks. By using this platform to report bad debts; businesses will not only get an opportunity to recover their dues but they will also help build a pool of credit information which will deter wilful Defaulters from committing any Default."

Founder

Debtors Watch team is determined to provide quality services and continuously develop new features to meet the requirements of our members and society to help them take informed credit decisions and manage their cash flows efficiently.

In case of any clarifications, you can write to us on team@debtorswatch.com