In recent years SMEs are owed an average of £67.4 billion in unpaid invoices. Typically, it takes SMEs 72 days to receive payment for their invoices. It’s important as a business that you’re taking the necessary steps and measures to check who you are going into business with as a first line of defence. Late payments can cause significant problems which could affect the overall performance of the company.
Here are some reasons you should be credit checking your customers and suppliers:
1). Vet any potential customers or suppliers
By carrying out a credit check on a potential customer or supplier you can see when they incorporated their financial books the level of credit risk and the ownership of the business. This can help you to decide then whether you want to do business with that company and whether you would offer them credit terms.
2). Check their financial history and ability to pay
Any potential business or supplier could tell you that they are financially stable but getting a credit check is the quickest and easiest way to check the financial history of the company and whether they are stable.
3). It can make you more competitive
By checking their financial status and their credit history it can then help you determine whether you want to offer credit terms as the method of payment. This can make your business more competitive as it could be preferential by suppliers and businesses to pay by credit in terms of advance payments.
Here at the Chamber we can carry out credit check reports on any UK and international business. If you would like to learn more please email email@example.com