The importance of doing credit reports on potential, and existing, clients can not be overstated. The cost of a credit report is minimal when compared to the loss you may suffer from the non-payment of a potential client.
Performing business credit reports to examine prospective and current customers ought to be a daily part of company life; nevertheless numerous business are still leaving themselves open for the hazard of bad debt by not performing such checks.
Carrying out credit checks with business credit reports will normally enable companies to make much better informed choices about whether to extend credit. Whilst performing such checks seems like good sense, less than a 3rd of SA businesses carry out a credit check prior to trading. And this looks unforgivable when you think about that virtually half of SA companies have actually lost cash in 2013 when trading with other businesses.
Whilst these figures are surprising, we’ll now take a look at a few of the various other reasons evaluating business credit reports and various other credit checking devices is crucial to guaranteeing your company’ success.
Poor cashflow management is among the main reasons companies fail. The hazard of this can be stemmed by carrying out a credit report on any company you are thinking about extending credit to. This applies simply as much to existing customers as it does possible customers, yet in 2013 47 % of business failed to perform any check on a business prior to getting in an arrangement with them and 84 % of business supplied items to existing consumers without revisiting their business credit report.
Develop Acceptable Credit Limits
A proper credit report will indicate to you whether you should extend credit to the applicant, as well as how much credit you should consider to extend. This may change in future, as your client’s business grows.
Comprehend the Business
A business credit report will not just discover the deceitful business addresses etc, but will likewise show director or member details. This info will permit you to examine previous directorships which can offer a healthy idea into the present directors’ capability to run business is a lucrative way.
Expose Illegal Business
It is an unfortunate reality that recently there has been an increase in deceptive habits where deceitful business people are presenting themselves as real businesses in an attempt to deceive business from their services and products. Acquiring a business credit check would assist to protect you from such scary habits as you can be ensured that the business does really exist.
Carrying out credit checks with business credit reports is a really reliable means to recognize brand-new company development targets. Certifying your targets initially to establish whether they are creditworthy or not will assist to improve your sales efforts therefore conserving you money and time.