Halloween is a time where people are scared by ghosts, witches and zombies but for many businesses, it’s late payments and unstable cash flow that cause the real fright. While Risk in Business is unavoidable, a Credit check can help you to manage and even prevent unexpected scares.

Overdue and missed payments are an inevitable part of a business and to eliminate them completely would be a miracle, instead, you can reduce the risk and prevent seriously damaging your finances by carrying out a credit check. A credit check can provide you with a client’s previous payment history and financial behaviour; this can help you to decide how much of a risk the client poses when it comes to paying regularly and on-time.

Associating with a business that is notorious for not paying their clients, avoiding payments and generally being unsavoury. A credit check gives you a look at how the client operates their business. A lot of CCJ’s or bankruptcies on their record indicates that they’re unreliable and potentially financially unstable so should be considered a risk. Not only does a credit report give you information about a business but also about the directors too. If a director has been involved with companies that have had financial problems, CCJ’s or bankruptcies then it brings into question their ability to manage money.

A credit check is a great resource to use with new clients but can also be used with existing customers. If you have noticed a change in a client’s payment behaviour, it may be a warning sign that something is wrong. A credit report can alert you to financial issues and flag potential risks before they cause too much damage. Do you know how your business appears to the outside world? A credit check on your own company can help you to manage your financial information so that you don’t appear as a risk to potential lenders or suppliers.

If you are looking to secure funding or credit, then you can guarantee that a credit check will be carried out on your business. If you have a “clean” report then you will encounter fewer problems and be offered better rates, conversely, if you have been issued CCJ’s or have defaulted on payments then you will be seen as a higher risk and will be charged more. As a high-risk client, you even face the possibility of being rejected for credit. If your application is rejected, then it will still appear on your credit report and can further harm your chances of being declined in the future.

Credit reporting can significantly reduce the damage caused by common business risks. Instead of spending valuable time and resources chasing late payments from delinquent clients, a credit check can save you the hassle. Let Commercial Domestic Investigations keep your business scare-free this Halloween, contact us on 08444 159200, use our contact form or email [email protected].

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