How do you perform an online business credit check?
With today’s economic climate demanding stricter payment terms and more visibility into your customers’ ability to pay, business credit checks have become an important part of your day-to-day business. A simple quick online check can save hours of chasing payments and ensure you have a good idea of the state of your customers’ finances.
Debt collection can be expensive and time-consuming, so selecting the customers you deal with based on their ability to pay can reduce your exposure and help ease your cash flow in these important economic moments. It’s also important to get regular credit checks on your older customers, time can change a business’s circumstances quickly, especially in today’s fragile economy, by ordering regular checks you can keep track of customers who are in trouble sooner to be filtered out on your bills. .
Scores give you an indication of a company’s creditworthiness based on a number of factors and some complex behind-the-scenes numbers. They are a guide you can use when looking at a company report and trying to agree a recommended limit with your client. Company ratings are based on the latest information files available at Companies House, they are not like consumer credit reports where financial institutions report your information on a monthly basis, so most ratings cannot account for missed payments etc.
Information from company accounts, historical accounting information and any county court rulings help establish a rating. With company reports you can also see full details of any company director and any other companies they are involved in, which can be useful when looking for new startups or if a company changes its name.
In general, the credit score takes into account many different elements, mainly taken from the company’s accounts, and should be used as a guide to reach your own conclusions about your customer. A simple quick online check is all it takes to help provide peace of mind and get the information you need to make an informed decision about your client.
It can also be useful to check your own business credit rating, especially if you are applying for new business finance or lines of credit with suppliers, identifying your weak points means you can start working instantly to improve your credit rating your company
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