Thursday, 17 November 2016 10:00

How to Read a Company Credit Report

When it comes to managing your finances in business, knowledge really is power. And this is never more the case than when you are signing agreements to sell your products and services.

As a creditor, the main thing you want to know is whether you are going to be paid fairly and on time. The last thing any business wants to do is get into an arrangement and end up not getting paid.

Published in Guides

Although many small and medium-sized businesses know the importance of background credit checks on new customers, a lack of familiarity with the process of actually carrying out a credit check can lead many to overlook this crucial step in their risk management.

Safe Collections have teamed up with credit check specialists Experian to make it easy and affordable for freelancers and fledgling businesses to begin credit checking new customers.

Published in Credit Control

Most people have heard of credit checks - even if what you immediately think of is the background check the bank runs when you apply for a credit card, loan or mortgage.

In principle, securing a credit report from Experian on a new customer is the same process, even if you are not lending them money; any goods or services provided upfront, to be paid for later, still represent a line of credit, and a risk to you if the customer fails to pay.

But how do you know who will pay in full and on time, and who is a higher credit risk?

Published in Guides

The world of credit control brings to mind the infamous Donald Rumsfeld quote:

"There are known knowns; there are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don't know. But there are also unknown unknowns - there are things we do not know we don't know."

Admittedly he was talking about weapons of mass destruction, but the same applies to your customers' financial situations, and effective credit control eliminates as much of the 'unknown' as possible, and maximises the 'known knowns'.

Published in Credit Control

The Institute of Credit Management (ICM) and business minister Michael Fallon have warned that it is "crazy" to fail to credit check new and existing customers.

Each month, the ICM publishes a new top tip to help safeguard small businesses' cash flow, and at the end of January its latest advice, written in collaboration with Mr Fallon, was released.

Published in Credit Control

You could be putting your business at risk by failing to carry out routine credit checks before extending a line of credit to customers.

Any time you conduct work on behalf of a client, or supply goods to them without demanding payment upfront, you are effectively creating a line of credit - and increasing the total degree of risk to which your own company is exposed.

Published in Credit Control