International credit reporting

Many UK companies are expanding into new markets to look for customers and international trade is becoming an increasingly popular option. It is important to credit check your customers and suppliers within the UK, this should be even more important when dealing with them overseas.  There’s always an element of risk, how do you know if your business partners are financially stable and their financial position is in a state they say it is? This is why you should thoroughly understand the credit worthiness of everyone you go into business with.

Why is it important?

  • Help you make informed decisions from looking at company’s past and highlighting any potential future issues.
  • Elements like fraud and corruption are becoming an increasing problem, this is why checking their credit history and background can reduce the risk of this so you know who you’re actually doing business with.
  • It can be a challenge keeping up with payments when operating just in the UK but factor in differing time zones, language and regulations. You want to be sure the company you’re entering into have a good track record of paying on time.
  • It’s important to credit check not just the company but the country you are doing business in. What is the economic environment like? What about the status of its currency and inflation?

What key information should I find out?

  • What’s the registered company address?
  • Has the company submitted a full set of accounts?
  • Is the company solvent?
  • Can the company provide financial guarantees if you request them?
  • Does the company have any disputes against it? E.g. late payments or CCJs.
  • Can the company provide customer and supplier references?

Where can I get this information?

There are many companies in the UK which offer international credit reporting as a product such as Experian Business Express. Instead of having to collate research from different areas, Experian does that for you and presents it to you in an easy to read and understand format.

However if you wanted to seek a local service, you could try the following contacts:

  • The British Embassy in the local country
  • British Chambers of Commerce can provide information about credit checking services in various countries.

Credit reports for overseas companies generally cost more than domestic reports but it will be worth it to get an overall picture of the company’s financial health. If running too many credit reports is out of your budget then you should limit them to your large contracts or business partners where there’s greater financial risk involved.

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Posted on by Cindy Yip

Estimated read time: 3 mins