Company credit report
A company credit report is essential to assess financial stability. Whereas in financially buoyant times companies may be more trusting of a potential customer’s ability to pay, when the stakes are higher, finance teams become more risk averse.
They want to investigate the financial credentials of a customer rather than leave it to chance.
Company credit reports enable businesses to make informed decisions and have the peace of mind that they have done their due diligence to mitigate risk. They divulge information about a customer that influences a supplier’s decisions around offering credit, the terms of that offer or the amount of credit they should give.
That said, there are still some limitations in the information presented in company credit reports. That is where Top Service is different to traditional credit reference agencies.
Part of the credit information we provide to our customers includes trading experiences. This gives you an idea of how well a potential customer is paying their suppliers, which will give you a good insight as to how they will pay you.
These trading experiences are sourced from our thousands of members, and will tell you things like will you be paid on time, are they likely to raise a dispute, are they approaching you because a competitor has them on stop, and lots of other useful information.
Read on to find out about company credit reports and why you should carry out credit checks on potential customers. Then you will find out about Top Service and how we can give you much more thorough information to help you make more informed business decisions.
What information is in a company credit report?
A company credit report contains the following basic information:
- Business details – the business type, date of incorporation, registered number, registered office, contact telephone number and website address.
- Company ownership – who really owns the company. This might be different to the impression given in public. For example, there may be a holding company or a director that is never publicly mentioned.
- Director and shareholder information – director names, age, nationality, the date they were appointed as a director, their financial track record and any shares they may hold. This information is particularly helpful when checking on a relatively new business.
- Credit risk score – out of 100. The higher the number, the lower the risk.
- Financial information – basic details including cash in the bank, net worth, assets and liabilities.
- Credit limit – as a guide, the company credit report will suggest a credit limit.
- County Court Judgements (CCJs) – debts that a court has agreed are owed to a claimant (creditor).
- Event history – a chronology of significant events in the history of the company.
Why should you do a company credit check?
The most common reason for conducting a company credit check is to find out about a prospective customer and the likelihood of them either not paying you or taking a long time to pay.
Both scenarios can be costly, not only in terms of the money involved but also the hours spent on administration, chasing money, or going to court.
Once onboarded, it is also advisable that you regularly check a customer’s financial position to avoid complacency and potential bad debt. If you are owed payment by a company that goes out of business, it is unlikely you will ever see that money. You will be in a queue with other unsecured creditors behind HMRC and banks.
It’s not only your customers that you should credit check. You rely on your suppliers to provide the goods and services you need to, in turn, service your own customers.
If your supplier has bad debt this can cause a significant chink in the supply chain that could eventually affect your own business. Trying to quickly replace a supplier can be costly.
By regularly checking on the financial position of your significant suppliers you can futureproof your capacity to supply your own customers with the service they expect.
Access business credit scores to help grow your business
A company’s credit score will tell you how much risk is involved in offering a line of credit.
Being vigilant by meticulously credit checking companies will help you grow your business.
Each company credit check provides a credit score. This score can be anything between 0 and 100.
The higher the credit score, the lower the risk to you in offering credit. If a company has a low credit score it doesn’t mean you shouldn’t deal with them. You can supply goods and services on an upfront payment basis instead.
The credit score gives an indication of how likely it is that a business will become insolvent within the next 12 month period. If no credit score is available, it could be for a variety of reasons: the business is no longer trading, no accounts have been filed, the only available accounts are too old, or the business is too young to supply any information.
Importantly, a credit score usually provides a snapshot of when a company pays its debts, whether payments fall within the credit terms or over the payment deadline, or if there are any CCJs against the company. Overall, a credit score provides vital information that helps you make informed decisions about how your customer/supplier relationship should be financed. It puts you in control of the growth of your business and avoids you having to manage bad debt.
Top Service – we are a construction industry credit reference agency
Top Service is a credit reference agency exclusively for the construction industry.
We’re different to other credit reference agencies in that we don’t rely on a company’s most recent set of accounts and public record information to provide credit scores. In total there can be a 21 month gap between the filing of the last accounts and the date on which a credit report is being run. In that time a lot can happen that makes a previously creditworthy company no longer a good risk.
We understand how the construction industry works. Insider Intelligence, our unique membership credit check platform, invites construction companies to submit their own trading experiences with a company, from which an up to date credit score is allocated.
This ‘live’ credit information that is updated daily allows you to make more informed decisions and minimise the potential for having to deal with bad debt.
What sets us apart from the rest
Unique, industry specific, trading experiences
Experts in prevention & recovery for the construction industry
Unrivalled customer service levels
Tailored recovery services geared for the industry you are in
Specialist retention collection service
No contract to sign – you are not tied in
Membership Benefits
Becoming a member will give you access to the industry’s most invaluable credit information and arm your credit controllers with everything they need to make the best decisions for your business. You will also have access to our exclusive recovery services which will help you to keep the cash coming in. Being a member has many benefits
Thousands of your fellow construction industry traders are currently benefitting from being a member. Can you afford not to benefit yourself?
- More informed
- A competitive advantage
- Reduced bad debt
- Fewer problem payers
- Improved cash flow
FAQs
How do you find a business’s recent financial activity?
Through human intervention. Our prevention team investigates company activity to uncover information that isn’t held on public systems.
What kind of businesses do you help?
All of our work is for construction companies including contractors, subcontractors, suppliers such as crane hire companies, construction product suppliers and merchants.
How do I access the credit information I need?
By becoming a Top Service member (no contract or tie-ins) you will have access to the most comprehensive credit information within the construction industry. Once you are a member, you can access the information by logging into our website, emailing us or telephone our team.
Top Service provides company credit reports that can help your construction business avoid bad debt
Get in touch with our expert team for more information.