It can be difficult to know which customers are worthy of credit. The best way to avoid late or missed payments is to request a credit check on potential clients. A credit report gives you access to business’ key financial information; this information can help you to make a decision about who to work with and who to avoid. As a business, there are some things that you can do to decide if you should be extending credit to your clients.
Ask yourself some questions
Before you agree to begin work with a new client, make a list of some standard questions that you want to find out before you continue. Are the client’s website and contact details up to date? This will give you an indication of how active the company is. If their phone line doesn’t work, then you may want to question how they do any business. There may be a reason for this out of date information, but it should start to ring some alarm bells.
Check out their business address, if it is close by then visit the site in person or take a look at Google maps and scope out the building. Some firms are small, many even work from home, but if you are dealing with a huge, well-established business with a large turnover, chances are they will be based in a large office. It’s always best to check that the premises are suitable for the supposed size of the business.
How successful are the directors? If you are working with a limited company, then the directors are obliged to submit their information to Companies House. This means that you can do a fair amount of research on the directors, if they have a string of failed businesses behind them or if the business you intend to work with has had a lot of new directors come on board, this can be a sign of financial trouble.
Work as a team
Ensure that the whole team is aware of situations with clients, especially your finance and sales teams. If your finance team has refused credit to a client as they have a poor history, and your sales team is doing a deal, and they choose to offer credit as part of the deal, this can be very damaging to the business. Make sure that everyone is on the same page.
References and testimonials
Take the time to research a potential new client, speak with previous suppliers and find out how the dealt with business, take a look online to look through some honest reviews. These reviews may be on Google, on the company’s website or social media channels. These honest reviews will help you massively when it comes to making a decision; it should ring alarm bells if you cannot find a single review.
At Commercial Domestic Investigations, we understand how important it is to get to know your customers and their habits. That is why we offer a credit reporting service, so you can access key financial information to give you the peace of mind that you need to continue trading with confidence. If you want to speak to a member of our team and discuss your requirements, contact us on 08444 159200 or email firstname.lastname@example.org.