Credit and Finance
Can you rely on your suppliers to deliver?
If you rely on good faith alone to ensure your suppliers are financially stable and able to deliver, you’re not the only one. According to a recent Experian survey1, over a third of businesses admitted that running a credit check on suppliers is not a standard procedure for their company, despite the fact that a supplier failing to deliver can spell disaster for them and their customers.
Among those surveyed, only 19% of firms check the credit scores of all suppliers before working with them, while 36% check some of their suppliers’ credit scores.
Worryingly, 40% admit to not checking them at all.
Suppliers are an essential part of every business, but unknowingly putting your trust in a financially unstable company can damage your own service and products. If a supplier lets you down, you may not be able to fulfill the promises you’ve made to your customers. As a result, your reputation and any future business contracts could soon suffer.
When going into business with a supplier, it’s common for the company’s sales team to promise you the world, and it might be tempting to rely on their word alone. However, conducting a quick background check on the business beforehand is a much more reliable test to find out whether this is a partner you want onboard.
Experian’s Business Express Credit Reports allows you to check any business’ credit score and financial history instantly so you can make a decision based on factual information about whether to work with them. You’ll spot any warning signs that a business may be struggling or if it looks like it could go into administration.
Although 48% of those who didn’t carry out credit checks on suppliers cited ‘never having a problem with a supplier’ as a reason, remember that even the circumstances of trusted suppliers can change, and they might not alert you of any financial difficulties they could be experiencing. Experian’s Business Express Credit Reports allows you to keep track of multiple suppliers, alerting you to any changes in their financial situation so you can make a well-informed decision about whether to carry on doing business with them.
Running a business of any size comes with many challenges, but by taking the time to do your homework on your suppliers, you can ensure you don’t get sprung with anything that stops your future success.
Have a detailed picture of your customers and suppliers with Experian. Find out more here.
1 Experian survey was conducted between December 2017 and January 2018. In total, 115 small and medium sized businesses took part in the survey.