Credit checks are a vital step in the process when it comes to working with new customers and it’s important to get them done as early as possible.
You need to understand the status of a client and what the potential risk may be before you start dealing with them. As you will be paying contractors before you get anything back from the client, any delay or non-payment could see you suffer a significant loss.
A credit check will provide you a clear picture of their financial history and any incidents of financial mismanagement. This is important information; you need to asses risk and negotiate fees and payment terms that suit. Ideally, you'll want to be insured against bad-debt too.
Questions your credit check can help you answer:
When should you run your checks?
Timing is everything when it comes to credit checks. The best time to run such checks is when you first pick up a vacancy from a potential customer. Otherwise, you run the risk of hitting the following issues:
Ask too early - If you are checking out a company before you are even talking to them, then that will be of little use to you. It may be months before you convert them into a business opportunity - if at all – and during that period, anything can change.
Ask too late - In contrast, you don’t want to end up in a situation where you have a contractor starting the same day and only then find out that the client is a high credit risk. This could leave you in an embarrassing situation where you need to renegotiate terms, or worse still, back out of the deal completely.
Credit checks with 3R Finance
At 3R we’re different, we offer upfront, unlimited and free credit reports to all our clients. They are turned around within the same day and if you need one immediately, you can also phone your Account Manager for help.
To find out more about how 3R can help with your credit checks,
give us a call on 01489 854 741 or email firstname.lastname@example.org