Do You Run Credit Check Reports on Your Business Suppliers and Clients? You Should. Here’s Why.

Ann Marie Smith

Mar 15, 2021

Extending credit to customers and clients can help you attract new business — and retain current customers. However, every time you do it, you are taking a risk that they will not pay you back. Credit check reports help you better evaluate the risk before you grant them credit, as well as if they are not paying their current bills on time.

There is also risk involved in working with suppliers. Many businesses learned firsthand in 2020 what happens when their supply chain gets disrupted. It caused problems getting products and raw materials, and left many businesses without products to sell or the materials they needed to fulfill contracts. Some suppliers were forced to close completely and left behind unfilled orders.

Moving forward, companies are now sourcing multiple suppliers and making sure their suppliers are financially sound before making commitments. This is another area where getting business credit check reports can help you make better decisions to protect your supply chain.

Protecting Your Cash Flow

One of the most important things in business is managing your cash flow. You need money coming in to pay your bills, employees, and suppliers. If customers fall behind on their payments, it can have a ripple effect. It might mean making late payments to your suppliers — which can put your relationship at risk and negatively impact your business credit rating.

If suppliers are having cash flow problems and paying their bills late, it may inhibit their ability to get the raw materials or products they need to fill orders. This can create slower fulfillment times that flow downstream to you. If you do not have the materials or products you need when customers want them, you are losing out on sales.

One of the most important things you can learn with a business credit report is a company’s ability to pay. Credit check reports will show you how a business uses credit and if they do so responsibly. The right credit report for business will show you whether they pay their bills on time or are likely to let bills go delinquent. This can help you decide credit terms and save you time pursuing late payments and collections that hurt your cash flow.

Knowing your supplier’s financial situation can help you make better decisions about whether they will be able to fulfill your orders or whether you should look for another source. When your business depends on getting products or services from others, you cannot afford to put your business at risk if they are having trouble.

Credit Reports Business

If you have never run credit check reports on your clients or suppliers, it is easier than you think.

You are probably familiar with consumer credit reports. They provide snapshots of a person’s financial health and credit history. Credit reports for business provide similar information, but with substantially more detail to help you assess risk.

While you need permission to run someone’s personal credit, you can check the credit on any business — whether they are a public or private company — at any time and without the need to ask for permission first.

In an uncertain economic environment, more companies are turning to the credit reports for business for answers. There are three major business credit reporting agencies:

  1. Equifax
  2. Experian
  3. Dun & Bradstreet (D&B)

While you will get similar information, including a business profile and financial data, each agency uses different sources of information to create its own scoring model. Each provides slightly different information about businesses that can help you evaluate your clients and suppliers. By selecting the right business credit report, you can determine if a client or supplier is a valid business entity, pays its bills on time, and is free of liens, judgments, or bankruptcies.

By going online to accredit’s self-service website, you simply view the options, select the report you want, enter the company name you are checking on, and click. You will be able to download the credit check report immediately. There are no recurring payments or subscriptions with accredit. If you are not sure which type of credit report is right for you, download our whitepaper to learn how to select the right credit report for business.

The Information You Need

If a client or supplier is showing signs of financial distress or has trouble paying its bills on time, you need to know. This knowledge can help you better assess your risk in doing business with them and under what terms.

Credit reports for business can give you the peace of mind that you are making good business decisions and protecting your cash flow.

Search and select credit reports for business from Dun & Bradstreet and Equifax.