Chances are, your business relies on several others for day-to-day operations. One weak link in the chain behind you – a failure of your supplier to deliver the agreed goods or materials, for example – can quickly put your ability to complete and be paid for your work at risk.
Naturally, you will have carefully vetted your suppliers in terms of their reliability through references or general googling. But how can you protect yourself from a supplier suddenly falling into financial difficulty and being unable to deliver what they promised?
It’s a sobering scenario, but one that is in these times of growing economic uncertainty all too common, unfortunately. The answer lies in a robust credit checking and credit monitoring service like CreditFocus.
Running a business credit check should be part of your due diligence process before you get close to signing a contract with a new supplier.
With CreditFocus, you can run a business credit check on up to ten businesses. You should prioritise the customers and suppliers that would pose the most risk to your business’ cash flow if they fail to follow through on contractual agreements.
The credit check will show you in-depth insight into whether your supplier has a history of being able to maintain a healthy cash flow. When you run a business credit check on them, you can access all the information a prospective creditor would see, including their overall credit score or whether they have any CCJs. From this you can judge whether a prospective supplier is at immediate risk of going under or whether they have the potential to make a stable long-term supplier.
You will also see a payment indicator. This uses historical information to assess how reliable they are at paying for their own goods and services. You might think how they manage their own cash flow does not affect you directly. However, if they lose contracts with their suppliers through non-payment, this is likely to mean they cannot supply you with what you need, having a knock-on effect on your ability to complete work.
To keep your supply chain uninterrupted, it’s a good idea to keep a watchful eye on the credit status of companies you’re doing business with. You will get an alert if any change happens to their credit status. This can give you crucial warning if they suddenly fall into financial difficulties and are unable to provide the goods or services you are expecting from them.
If you get advance warning of a disruption to your supply chain, you have time to set up an alternative arrangement so that you aren’t forced to miss a vital deadline or delivery yourself.
CreditFocus makes it easy to monitor your suppliers’ financial health, without running constant credit checks. Our simple dashboard gives a comprehensive overview of all the information you need and direct alerts let you know if it’s time to take action. Start protecting your business from risky suppliers with CreditFocus.
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