Blue Book Members: Understanding Pay Indicators

Blue Book Pay Indicators provide Members with a summary of the overall reported pay practices of a company, using a statistical equation.

Pay Indicators are assigned based on reports received from trading partners, evaluating the overall business practices of a company, including pay patterns.

Pay reports received on a business are placed into one of five categories:

A = Pay reported mostly within terms

B = Pay reported generally within terms

C = Pay reported variable

D = Pay reported generally beyond terms

E = Pay reported mostly beyond terms

How will using Pay Indicators help my business?

• Quickly identifies how a customer is paying their other suppliers
• Assists in making credit availability decisions
• Determines your overall credit portfolio risk
• Identifies trends
• Helps ranking of accounts
• Assists in creating new credit guidelines
• Saves you time and money 

 

How are Pay Indicators calculated?

Many credit extenders confidentially provide their Accounts Receivable (AR) aging data every month. A proprietary equation analyzes the AR aging data (also referred to as “pay reports”) and computes the Pay Indicator based upon the following parameters:

• Number of unique credit extenders reporting on the subject company
• Number of pay reports in the past 12 months and in the past 90 days
• Dollar amounts that are reported current and past due
• Quantity of reports (regardless of dollar amounts) that are reported current and past due
• The age of each pay report

 

Do all companies have a Pay Indicator?

To ensure that Pay Indicators conform to Blue Book Services quality standards, a representative amount of current pay reports must be reached before a company is issued a Pay Indicator. Thus, not all companies have a Pay Indicator. The absence of a Pay Indicator suggests that limited pay reports have been received on the company.

How often does a company’s Pay Indicator change?

Changes in a company’s Pay Indicator are based solely on the data received on the company. If updated pay reports are received that are not consistent with the company’s reported Pay Indicator, the Pay Indicator will change.

It is important to note that pay experience information may include disputed terms, skipped invoices or other extenuating circumstances. More in-depth information about the pay reports received on a business are provided in a Blue Book Services Business Report.

To learn more about this or any other feature of Blue Book Online Services (BBOS), please contact our Customer Service team.