It’s a common misconception that credit checking is all about exposing the bad on company credit reports. While we are the experts at helping you spot those troublesome customers, this is only half of the story.
We can help you stay ahead of the curve by alerting you to which customers, locations or portfolios have great payment history, are experiencing good growth and are low risk to work with- so it’s not all negative!
Exposing the risks on company credit reports – what can you find out?
History of slow payments
Once you have access to their credit report, you will be able to view the days beyond terms (DBT) a company takes to pay its bills and be able to spot if invoices are getting paid late or on time.
Late payment of invoices is one of the biggest problems that SMEs face, with more than half of UK SMEs having to wait 30 days or more for an invoice to be paid. According to a Creditsafe report from April 2017, the national average DBT was 10.5 days, with the construction industry showing the overall worst payment performance.
You may well be trading business to business, but ultimately there are going to be people behind that business who you will be making connections with and who’ll be making the crucial decisions.
Understanding a director’s history should play a pivotal role in deciding whether to do business with a company. Did you know that 41% of UK directors were once the director of a company that is no longer trading? Reviewing the information in a director’s report will not only give you a better understanding of the direction in which that company is heading, but will also reveal any skeletons hiding in the director’s closet.
The risk factor
One of the main features on a company credit report is being able to identify whether a business is risky based on their credit score. This is calculated using lots of different factors telling you whether they’re high or low risk and how able they are to meet their obligations at that particular moment in time.
By looking at their adversaries on reports such as County Court Judgments, you can see how prompt they are in repaying money they owe – these are judgements that other businesses have raised against them due to them not paying invoices on time.
Spotting the opportunities – what advantages do you get from a company credit report?
You can have an insight into a company’s cashflow
The speed at which a company pays their invoices can be indicative of how reliable and financially sound they are. If they always seem to be paying suppliers on time, this could indicate how prompt they are in other aspects of business, such as being able to deliver products and services to you on time. This is a positive sign that their cashflow and finances are in good order for them to be able to make timely payments as opposed to constant late payments.
You can see who’s experiencing growth that you can benefit from
Your business credit report and score are dynamic. They constantly change based on a variety of criteria, including the number of reported business credit transactions, outstanding balances and whether you pay on time. Monitoring the companies you work with can help indicate which businesses are growing and in the position to make bigger value purchases.
Highlighted industries that are more favourable to work with
In these highly competitive times, wouldn’t you want to highlight the industries that are more favourable to work with? Regardless of the industry you operate in, credit reports can give you an instant advantage in understanding which industries are growing and expanding their revenue. With Creditsafe’s Risk Tracker, you’ll be able to save searches and get notifications to identify who the fastest growing players in the market are and the strongest industries.