In today's cannabis market, maintaining healthy cash flow and strong financial stability are essential for any operator. When you’re a brand who’s never previously self-collected, however, it’s nearly impossible to have visibility into an account’s recent payment histories which may help inform your ability to extend different net terms. This is where Nabis' Credit Scoring System comes in.
This tool not only benefits brands, but it also incentivizes retailers to pay in-full and on-time in order to improve their credit scores over time or maintain excellent credit standing. By providing greater transparency and accountability in payment histories, Nabis' Credit Scoring System is transforming the way brands and retailers manage their AR and helps them maintain stronger and more trustworthy relationships.
How Our Credit Scoring System Works
Leveraging Nabis' large trove of data from over 500,000 orders placed and collected upon, Nabis has built a proprietary algorithm that measures every retailer’s overall ‘Credit Trustworthiness’ based on a variety of metrics from their previous orders. This algorithm is the foundation of our Credit Scoring System, which incorporates both qualitative and quantitative measures with adjustable weights, so that a retailer’s credit score may update in real-time.
Since Nabis is an agnostic wholesale platform, brand partners maintain complete control when it comes to owning their sales and making strategic decisions about extending net terms. Our Credit Scoring System remains a vital and unique feature of our platform so that brand partners have the utmost visibility into current 'Trusted' retailers and ‘Less-trusted’ retailers.
Retailer credit ratings are based on several data points including but not limited to aging balances, payment history, payment terms, and partnership length. The credit ratings are grouped into 5 different tiers:
- Excellent track record of paying on-time and in-full
- Good track record of paying on-time and in-full
- Mixed track record of paying on-time and in-full
- Significant risk of defaulting on payments. Ineligible for Nabis Capital factoring
- Moderate risk of defaulting on payments. Ineligible for Nabis Capital factoring
If a brand partner still wants to deliver to a ‘Less-trusted’ retailer, the invoice form includes the acknowledgement of risk in order to aid in smarter order decision-making, particularly regarding payment terms.
Building Trust With Brands
For retailers, our Credit Scoring System aims to serve as a tool to help them establish more trust with brand partners and incentivizes them to achieve more term relationships to facilitate their cash flow. By maintaining excellent or good credit score standings, brands often can be more flexible with retailers when it comes to paying on terms. With preferred credit scores, retailers can also automatically receive pre-determined terms when shopping on the Nabis Marketplace, our retailer-facing e-commerce site.
Helpful Tools For Real-time, Strategic Decisions
Nabis' Credit Scoring System is a unique and valuable tool for both brand partners and retailers alike. While the credit score tiers help lend a hand to brands in determining account creditworthiness, retailers are also incentivized to improve their credit standing by paying off outstanding balances in order to establish better trust with the brands they carry.