If your business offers credit, you must make sure customers have a
good credit history, as this will increase the chances they will pay you
on time, every time. You could save yourself a lot of time and worry in
the future by researching them at the start of your working
relationship.
Ways you can check a new customer’s credit history include:
- Information – Collect the right contact information from the start, including a named person in accounts, where possible.
- Research - Investigate the potential customer; visit their premises; meet their people and get a feel for how they do business. The internet enables you to quickly and easily research what others say about them.
- Contact your potential customer’s other suppliers – Ask them about their experiences – crucially, whether there have been any serious issues regarding payment.
- Bank credit checks – Some banks will carry out business credit checks for you for a small charge.
- Checking software – There are various specialist software tools on the market that enable you to run credit checks on new business clients before entering into a contract with them.
- Use specialist websites – You can check a business’s credit history online by using websites such as UKData.com
If you really want to do business with a new customer but your
research makes you less inclined to grant credit, you can request
advance payment.
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