Why you should credit check your customers & suppliers - Protect your business!

Many people make the mistake of simply trusting their new customer. This is a nice thought! But you must protect your business and your work. Doing a simple, quick credit check on your new customer will give you that added security.

The number of debts that we are asked to chase, where our customer didn’t realise that their customer had history of late payments is astounding. I know its so simple to just accept the new business on board without any previous background on them. But by checking their history, at least you can decide what payment terms you offer them.

  1. Check potential customers

  • Make sure they are not a high risk to your business. Check their level credit risk and make a decision on whether they are safe to do business with.
  1. Credit Reports

  • Your new customer might tell you how timely they are with their payments, but always check for yourself. A credit report will show you the financial history of the company. It will also show you the history of the directors and associated companies. Doing a credit report will take you no more than 5 minutes. Its worth doing. If your customer fails to pay you in the future, it will take you a lot longer than 5 minutes to collect the debt.
  1. Monitor Your current customers

  • Set up a plan or schedule to continually monitor your current customers. You will stay one step ahead when doing this. There have been many occasions where a new customer has come to us saying that they need to collect a debt, but the company has gone into administration. If you can catch your customer before they dissolve their company, you stand a better chance of getting any monies owed.

Make running your business easier. Ask for credit reports, feel secure. Your customer wont ever know that you have done this. But at least you know that you made the right decision to work with them or not.

Get a Credit Report