Deciding to supply services and goods to another business is probably one of the most difficult decisions for a small business owner. Without a prior relationship, it can be difficult to assess if a new supplier will pay on time.

And, as a recent survey from Xero has revealed, if they do get it wrong, it can have serious knock-on consequences.

According to Xero, 38 percent of small business owners indicate late payments cause them to delay payments to their suppliers, while 15 percent claim this often sees them delaying wage payments to staff, along with other benefits.

The stats on the effect of late or delayed payments on business longevity are also pretty dire.

62 percent of businesses would not survive more than three months if all invoices went unpaid, while nearly 25 percent wouldn’t last a month.

So it makes sense that finding ways to avoid late payment heartache before it becomes a problem is a good first step. Asking for references seems outdated in a data and API rich landscape, so therefore a data driven approach is exactly how a number of fintech startups and partnerships are looking to solve this problem.

Xero’s Live Contacts, a partnership with the local arm of credit bureau Equifax (formerly Veda) is one such data driven solution. As part of a paid-up Xero subscription, businesses can now see a credit risk indicator against a contact in their database, helping them to better assess whether to do business or not, or even risk adjust payment terms.

According to Equifax’s website the indicator represents an aggregation of data from multiple sources, including commercial credit accounts and other debts, public record information, court judgements and writs, directorship details, proprietorship details, bankruptcies, debt agreements and personal insolvency.

At the other end of the data spectrum, CreditMonk in India allows businesses to add a review of a creditor’s payment behaviour via its platform. Similar to other review based sites, a company’s profile page displays star ratings for various payment behaviour attributes and softer elements like ability to contact senior management, or the company’s ethics.

Obviously such databases are only useful when they are data rich – which will be the key focus for the business with its initial free offering. An article on Bloomberg Quint states the company is yet to decide how to monetise its platform, although it’s not hard to see how various revenue streams could open up in the future, should they build a robust database of reviews.

Quality control will also be an interesting one. How the platform moderates businesses solely out to skewer their competitors will be interesting. But a combination of a Xero Live Contacts and a Credit Monk like service would be interesting. Maybe we’ll see exactly that in the future. However if you know of someone doing it now, share your research in the comments below!

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.