With trade payment being the blood line of B2B businesses, it is important to know how companies are paying their bills. Last year there was £12,567,889,275 worth of debt owed in the UK, and 39085 insolvencies in total that year, averaging 752 a week. With an ever growing trend of late payments sweeping the nation, businesses are taking greater measures to check who they are going into business with before signing a contract. Credit checking is fast becoming part of the furniture in a company just like a computer- directors and business owners can’t rely on a handshake and can’t take the risk of the unknown anymore when it comes to new business.
Here are five reasons to credit check to benefit and protect your business.
- Vet potential customers before approaching them. You can search any company in the world on our system, and if their credit report isn’t available we will investigate it on your behalf and get one for you between 2-10 days. You can check a company’s key finances, contact details, credit limit, credit rating and the days beyond terms it takes the company to pay their bills. This information is good to know before taking the plunge into a new business contract with a new company.
- Monitor your existing customers. Have you ever been doing business with someone and all of a sudden their business goes under? Have you been let down by a supplier because they became insolvent? Monitoring your customers using credit reports can save you a lot of time, effort and money when it comes to who you’re dealing with. Creditsafe’s Risk Tracker will monitor your chosen companies for you and alert you if anything changes on their credit report. If a company is doing badly, it will show on their credit report, and by monitoring them you can spot the warning signs. Once a company goes into insolvency there is little you can do to redeem the money owed to you and if you are determined to get your money back it will be a lengthy process through the courts to do so. Use credit reports to keep an eye on your customers and suppliers. If you can see a downward slope happening with their finances, credit rating or credit limit; cut your losses early and don’t risk being hung out to dry.
- View five years of real finances. A company can tell you they have advanced in recent years and their revenue is consistently growing, however if you are credit checking you can check if their sales pitch matches the black and white evidence. A Creditsafe report will allow you to see a company’s previous five year accounts, and will even tell you how much percent they have increased or decreased to the previous year. Key financials include the company’s profit and loss, balance sheet, capital and reserves, other financial items, cash flow and ratios. By seeing these financials for yourself you can make a fully informed decision on whether or not this company is stable enough to do business with based on your own standards.
- Check out the decision makers. We offer past and present director, shareholder and company secretary information on our credit reports. This includes their personal details such as their address, nationality and birthday plus how long they have held their position in the company. It will also show you any other companies they are appointed or connected to. Also available under this section is a director report, a consumer report, an AML report and a trace report. We aim to give you as much detail about the decision makers as possible so you can know who you are dealing with and who will be making the decisions on behalf of the company that could potentially affect you and your company.
- View Group Structure. Group Structure on a Creditsafe company credit report will allow you to see the corporate family tree and where the company you are looking at stands in the grand scheme of things under the corporate umbrella. It allows you to see the future of the company based on its relative companies. For example, if a company in America is starting to slip however the UK company is doing well, it may be a case of taking money from the UK company to keep the American company afloat. This could cause problems for the UK company which you are dealing with. On the other hand, if you are worried about the future of a company and then find out they are connected to one of the most profitable companies in business; this could also reassure you that they are ran by a good business tycoon.