Credit and Finance
Don’t leave positive cash flow to chance
As the owner of a small or medium-sized company, the question of cash flow is probably never far from your mind. Without enormous reserves in the bank, it can be extremely difficult to operate when customers don’t pay on time and, in serious cases, lead to your own bills, including staff wages, not being paid on time.
Both new and long-standing customers can run into financial problems – and sometimes they appear to come out of the blue. Worse still, if one of your clients goes into administration, you’re left with little choice but to join a list of creditors who may never get paid. Depending on the size of their contract, the loss of just one business from your books could be enough to derail everything you’ve worked hard to achieve.
Despite all this, Experian’s survey1 shows that 28% of businesses don’t complete a credit check for new customers, even though they have no experience of working with them. A third of respondents said this was because they had ‘never had a problem with a new client’, while another third told us that it ‘wasn’t a standard procedure’.
As many as 60% of those who took part in the research also said they believe that a customer’s ability to pay on time comes down to ‘a good track record’, but this seems like a huge gamble.
While it’s impossible to say for certain whether a company will fail to pay, or go into administration, the warning signs are normally there. Taking the time to check a customer or prospect’s business credit score using Experian’s Business Express helps you make an informed decision about who to work with from the start. You can apply for a single credit report, or track all your new and existing customers using our monitoring service, which provides regular alerts about changes in their credit score.
Armed with this information, you can quickly see whether the businesses you depend on have bad debts or county court judgments (CCJ), and safeguard your future success.
See how safe or risky it is to work with a business with Experian’s Business Express Credit Reports.
1 Experian survey was conducted between December 2017 and January 2018. In total, 115 small and medium sized businesses took part in the survey.