Advantages of credit checking customers
Why credit checking current or potential customers is so important.
Whether you're checking current or new customers, there are several reasons why it’s important to carry out credit checks.
Important risk assessment tool
Late customer payments are one of the biggest risks facing businesses. Chasing late payments costs money and can have a negative impact on your business. Carrying out a credit check can help you to protect the financial health of your own business.
Insight into customers’ financial situations
A credit check can provide detailed information about your customer’s credit history which will allow you to have the confidence to choose new customers or positively reinforce your relationship with current ones.
Help to set credit limits
It can be useful to offer customers credit, but the larger the amount of credit you offer, the greater the risk. A credit check can determine if credit should be offered and how much it should be.
Contribution to ongoing monitoring
Running credit checks on your customers and even your suppliers gives you valuable insight into the financial health of your entire supply chain, and allows you the insight to make an informed decision on credit-related issues.
Accurate and informed decisions
The information found in a credit report can be used to inform your sales strategy, helping you to approach potential customers who have the resources to pay you.