Why should you credit check your customers!

The way to protect your business financial health is by using company credit check services on your customers. Company credit check services help you make informed decisions about how much credit to allow your customer and what payment terms to give them. For example, if they are frequently “late payers”, you might only want to give them 14 days to pay you. On the other hand, the rest of your customers might be ok for 30 day terms.

Good financial health is a key part of your business and to maintain a healthy cash flow you must avoid “risky” customers and use reliable suppliers.

Getting a credit report doesn’t guarantee that your customer will pay you, but it does allow you to look into their previous financial conduct.

What you get from doing a company credit check

1. Verify your customer

  • Make sure they are not a high risk to your business. Check their credit score to decide what payment terms and amount of credit you can allow.
  • Verify their address, director’s information and whether they have any County Court Judgments (CCJS).
  • Make credit checking new customers a habit.

2. Avoid bad debt & cash-flow problems

  • Once you have the company credit report and have verified your customers details you can make an informed decision of whether you want to work with them or not.
  • If a customer has bad financial history, it does not mean that you can’t do business with them, however you should ask for payment at the point of sale.

3. Monitor Your current customers

  • Often customers come to us requiring business debt recovery services and we find that the debtor company is about to be “struck off” at Companies House. If you can catch your customer before they dissolve their company, you stand a better chance of getting paid.
  • Companies House offer a free company monitoring service. You enter the details of the business into Companies’ House and click to follow that company. If the company has a proposal to strike off, you will be notified by email from Companies’ House.

Make running your business easier, obtain company credit reports and get security. It may cost you to obtain a report, however this one little report could save you hundreds in the long run.