Why credit monitoring is as important as credit checking

Completing a thorough credit check should be one of your first steps at the beginning of a new business relationship with a client or supplier. Evaluating their business credit score against your capacity to manage the risk of non-payment or carrying out due diligence on a supplier is a vital part of protecting your business

Services like CreditFocus make it simple for SMEs to get the information they need to make an informed decision. Our CreditFocus company credit checks article explains all the features available and how they can help you feel confident in signing a contract with another business.

But an initial credit check is only part of the story. To protect your business over the long term you need to make sure you are aware of any sudden, significant changes in the financial health of companies you are dependent on for your cash flow.

If that sounds like a significant, unmanageable investment of time – don’t worry. With CreditFocus, both credit checking and credit monitoring are easy, quick and reliable.

Why is credit monitoring important for my business?

Like many businesses in the UK, you may rely on a few key customers to drive revenue and increase profits. it’s important to assess the financial risks a customer will have on your business to make sure your cashflow is protected as the future of your business could be determined by the choices you make with customers early on in the relationship.

Simply put, a lot can change after you get the results back from your initial credit check, especially in these times of global economic uncertainty. If your report isn’t generated at the exact point of a drop in credit status, you could miss important warning signs. The first you could be hearing of a reversal in a previously stable company’s fortunes is when they miss a scheduled payment.

This puts your business in a difficult position. You may already be a significant way into a project with expenses already incurred, materials already bought and locked into contracts of your own that depend on agreed payments being made.

A credit check will only show you historic and current information. But this doesn’t mean that you have to run constant credit checks whenever you feel nervous about an upcoming payment or worry that an important client is at risk of future insolvency. CreditFocus’s credit monitoring service will alert you to any changes you need to know about, so that you can keep your own focus where it matters: your business.

How does a credit monitoring service work?

With a credit monitoring service like CreditFocus, you sign up for a fixed monthly fee and get access to a wealth of useful information in return. CreditFocus will also help you digest that information into risk categories to help you make the right decisions for your business.

With a credit monitoring service like CreditFocus, you sign up for a fixed monthly fee and get access to a wealth of useful information in return. CreditFocus will also help you digest that information into risk categories to help you make the right decisions for your business.

CreditFocus’s clear dashboard makes it simple to track lots of different businesses at a time. Because you can add up to 50 companies to your credit monitoring watchlist, you can keep tabs on any business that may impact you along the chain. And you’ll get an email notification sent straight to your inbox if there’s a significant change of a business on your watchlists’ credit or payment indicator score.

CreditFocus uses Experian data, so you can be sure it’s up-to-date and accurate. Pulling from Experian’s extensive data set means that with CreditFocus you can monitor the financial status of over five million businesses in the UK.

CreditFocus’s credit monitoring service is designed to give you peace of mind for a low price and with next to no time investment on your side.

What can I do with information from a credit monitoring service

So what steps can you take to protect your business if you get a notification that a company you’re monitoring has had a drop in their credit status?

Getting advance warning that a company is experiencing difficulties gives you more time to act. If it looks like there’s a risk that a client will struggle to pay you, you could take action to change or enforce credit limits or make other arrangements to recover money that is owed.

If you see that a supplier is at risk of insolvency, you can begin to make arrangements with another company so that your business isn’t affected and you can still get access to what you need.