Many businesses sell a product for a set price, and the customer doesn’t receive the product until they’ve paid in full. However, not all business models are quite as straightforward as that, and you might be running a company that frequently offers its services or products on credit. It’s a business model that can be extremely profitable, but it’s also dependent on clients paying off their debt without fail.

Your company might specialise in providing loans or insurance, in which case you’ll almost certainly be relying on your clients being able to meet monthly repayments. Or, you could be selling your products on a finance basis, but that means you’ll need to know that your clients will continue to have the ability to meet payments for the foreseeable future.

It’s easy to assume that there will be no problems with offering your services on a credit or finance basis. However, it’s of vital importance to check: are your customers credit-worthy? Check with an online credit report if you want to have peace of mind knowing that your customers will be able to repay their debt because otherwise, it could be you that loses out.

Make Sure Your Customers Can Pay

If you really think about it, checking creditworthiness should be no different for businesses than it is for individuals. The banks won’t simply hand out loans to their customers without finding out whether they’ll actually be able to repay the loan, and the same applies when it comes to offering your services on a credit or finance basis to businesses.

Even the major phone companies won’t offer monthly contracts to customers who they fear won’t be able to meet the payments, and when it really comes down to it, the cost of a monthly phone contract might be much cheaper than the service you provide. You need to be certain that the money you’re owed will be repaid within the timeframe agreed, not only to protect your profits but also to ensure you can make future predictions regarding revenue and budget accordingly..

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Needless to say, you can’t simply ask your clients and customers whether they can be trusted because they’re obviously going to give you a biased answer if they require your services, but online credit reports are created using data sourced from a variety of third-party sources. That means you can place your trust in the information you are provided with, and it’s all presented in a clear format so that you can analyse the data with ease.

What Will a Credit Report Tell You?

As you’re probably aware, each and every person has a credit rating that the likes of banks use to assess a person’s creditworthiness. Similarly, a company credit report will provide you with a rating between one and 100, as well is information such as:

  • Average repayment times
  • Outstanding balances
  • Purchase histories
  • Bankruptcies
  • Company information

If you want to protect your profits and the future of your business, make sure you always request company credit reports on your clients, especially if they’re new customers.