Top Service News
Why traditional credit checks don’t always tell the full story
Published on
How often do you struggle to get paid? Whether it’s late settlements or getting paid at all, many contractors spend far more time than they should chasing payments. According to Construction News this is an industry-wide problem that reaches beyond main contractors. Companies throughout the supply chain are guilty of poor practice when it comes to payments.
It’s particularly frustrating for a contractor when they believe they have covered all bases by completing credit checks before engaging with a client. Surely, by investigating the company who will be paying you, you are mitigating financial risk?
The unfortunate truth is that traditional credit checks are often lacking when it comes to finding out the true financial position of a construction client.
The limitations of traditional credit checks leave gaping holes in crucial financial information
The limitations of traditional credit checks come down to a lack of information being checked or the validity of the information that is available.
Traditional credit check agencies use a company’s last set of accounts and public record information to produce credit limits and scores. But what’s happened in the meantime? When you consider that a business has a whole year of trading plus another nine months to publish its accounts, that creates a 21 month gap in which nothing has been reported. Being the most recent period, it is also the most important when it comes to checking the true financial position of a company.
Directors are not thoroughly investigated in traditional credit checks. Vital information such as the bankruptcy of previous companies can be covered up by making family members or associates directors when in fact they are just a front and not actively involved in the running of the business.
Top Service is the only credit reference agency dedicated to the construction sector
At Top Service we gather unique, real time credit information to minimise a contractor’s exposure to bad debt and slow payments. Through human intervention we spot anomalies that credit check systems miss.
Rather than wait until information is available on the Companies House database, we gather data from the courts. No other credit agency does this. We stop our clients giving credit to a company that is about to go into administration and prevent the loss of thousands of pounds through unpaid bills.
What makes Top Service different to traditional credit reference agencies?
Insider Intelligence is the unique membership platform from Top Service. We examine industry specific trading experiences to determine how a potential client is paying other suppliers currently, not 21 months ago.
Members of Insider Intelligence submit their own trading experiences so we can update the information we hold about a company. This information helps you to make informed decisions about whether to offer a line of credit or extend credit for a client. We can tell you the likelihood of being paid on time.
Our helpdesk teams notice changes in trading experiences that algorithms can’t. They will pick up on companies that are exceeding terms, overdue accounts and the time companies are taking to pay. Our debt recovery team also shares crucial information that has been picked up during an investigation. This information can help you avoid being lumbered with bad debt.
Insider Intelligence membership
An Insider Intelligence membership provides you with access to:
- Trading experiences – unique trading experiences of other construction companies
- Credit information – access to credit reports on all limited companies in Great Britain
- Company monitoring – daily updates on selected companies of any changes to credit reports
- Director monitoring – updates on who is running a company and notifications of resignations
Members are kept up to date with company developments but these updates are customised so that you only receive the information you want.
Top Service can help your construction business avoid bad debt
Get in touch with our expert team for more information.