How To Check Out Potential Customers Before Granting Credit

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.