Credit report? Many entrepreneurs have never heard of it. Yet it should be a MUST for every business when doing business.
What is a credit report?
For starters, a small introduction is in order. A credit report is used to check the creditworthiness of a company. These reports are provided by various credit information providers, for example, companies such as Reporting Accounts! It looks at annual accounts, payment behavior, liquidity, suspicious incidents in the past and even to related companies. With all this information, a credit limit with a credit score is then determined for each company, on the basis of which you, as an entrepreneur, can make a good estimate of the creditworthiness and reliability of your customer or business partner.
1. Defaults major cause bankruptcies
Defaults are one of the biggest causes of bankruptcy. When you as a company receive a large order from an unknown customer, it seems too reasonable to be true. This is often the case. Yet the temptation is great to facilitate the customer, at such a moment it may be advisable to request a credit report from the relevant customer. This way you can estimate the willingness of your customer to conclude the deal with peace of mind!
2. Small investment, high efficiency
Buying a credit report can already cost you a little price, but still, many companies offer this for free. Compared to the risk that you run in case of non-payment of a large order, this is a small amount. In general, most invoices are merely paid neatly by the customer, but the one time you do not see your money, you should have reason enough to monitor your customers in the future through a credit report.
3. Focus on your own activities
You have already experienced it once. That one customer that you had to call back for weeks to get your earned money. There will not be many people who like to do this because this is at the expense of your usual work. If you check this in advance with a credit report, you can see an estimate of how your customer’s payment behavior is. He always pays within the agreed payment term, or it always takes just a few weeks extra. Good to know so you can keep in mind. In this way, you will fall into the surprises of your debtors less often, and you will be more concerned with your other activities!