Running a successful business is a complex process that takes time and money. When you extend credit to a business customer, you are basically taking cash out of your company and lending it to them. You want to be reasonably sure that your customers will pay this credit back, on time and in full. Your business cannot afford to lose money due to bad business credit if you want to stay competitive in ever-shifting markets and economies. Credit checks from a reputable credit vetting company, like MarisIT safeguards you against this and protects your business.
What is a credit report?
A credit report is a compilation of information about the way individuals and businesses handle their credit and debt accounts. It includes important information like how much debt has been accumulated, how they pay their bills, whether they’ve filed bankruptcy or had any default or judgment against them. A credit report contains a lot of information that can be used to decide whether an individual or company is creditworthy. By running a credit check on new and existing customers, you can rate your credit risk and manage them accordingly
Business benefits of credit checks
Whether you are extending credit for 30, 60 or 90 days, a credit check is a good way to make sure that your customers pay you back. By using the right credit bureau and performing a company credit check you can predict the likelihood of being paid. It also will provide you with the insight you need to set credit limitations.
Credit checks track the credit histories of individuals and organisations by managing a pool of data submitted by entities and individuals trading in the market, and this information can be highly beneficial to your business.
Avoid bad debt
By running a credit check on a customer, you will be able to find out their creditworthiness and their likelihood of paying the debt.This means that your business can avoid the nightmare that is bad debt.
Determine suitable interest rates.
Credit checks will help you determine the risk associated with your customers. By evaluating your risk, you can determine whether or not to extend credit. If you decide to extend credit, you can also determine the appropriate interest rate to match the risk. The more you risk, the bigger the reward should be: that’s the general rule of business.
Maintain a positive cash flow
Running a credit check on customers will help you determine whether a customer will pay you on time so that you can make the necessary arrangements if they do not. This means you can maintain positive cash flow, and avoid any issues surrounding your businesses day-to-day cash requirements. To maintain this positive cash flow, you need accurate data and reporting that supports greater predictability. The better you can predict when you’ll get paid, the better you can plan. The creditworthiness and credit limits you set will also assist in generating reliable cash flow as your business can make strategic decisions to target the right prospects who are most likely to become fast-paying customers.
Estimate how long a business will be in operation.
If your business is looking to grow by entering a long-term partnership with another company, then a credit check is essential to effectively protect your business and minimise risk. You don’t want to invest in a business relationship and then have it end because your partner went under. A credit check allows you to determine the health, viability and sustainability of a potential long-term partner.
Online credit checks
Performing a credit check on an individual or business is easier than ever before thanks to the internet. Checking the business credit of any company is as simple as a couple of clicks with MarisIT’s powerful web services products. You will gain access to the latest credit vetting information on companies and customers within a short period of time. Our reports are accurate and sent to you quickly, so all the latest data collected about the company you are checking will be included in the credit report.
MarisIT has been protecting businesses since 2006. Our online web-based service will provide an all in one credit risk management solution. It is the most comprehensive tool for credit scoring and vetting all in one simple to use platform. Protect your business today.