Today we unveiled a new credit checking feature that helps businesses make more informed decisions on who they choose to do business with and how they do it. The feature is part of Chaser's growing suite of tools to help businesses better manage their customer relationships, providing them with the insights they need to support business growth.
"Chaser now provides business credit checking in-app so users can make more informed decisions on who they choose to do business with, and have the insights they need to make business decisions with confidence."
The importance of credit checking
Getting a new customer is really good news, but there is always a risk factor involved. Without a prior relationship, you never know exactly what to expect and what will or will not work. That's where a credit report comes in, by providing a layer of objective security & transparency to kick off that relationship in the best way possible.
A credit check usually addresses three important areas when engaging with a new client, which are: business verification, credit score & limits and financial performance.
Business verification is confirming that the company is genuine, checking the registration information and things like business address, and status.
Credit score is a rating of the financial reliability of the company in recent history, which sums up the risk of doing business with the company. Coupled with the recommended credit limit, it gives you an objective analysis of risk and what to expect.
Lastly, the financial performance is about analysing the detailed financials to understand the growth markers and stability of a business.
Steps to take when introducing a potential new customer
1. Carry out company research
- To help protect your business, you should conduct careful customer due diligence before taking on a customer. Considering the financial health of a client is important for assessing whether your business' bottom line will be negatively affected.
- The quicker you can establish whether a company is creditworthy, the less time you'll have to wait before you get your money.
- Some key ways to do your own research include:
- Reading the financial press – to look for stories relating to your prospect. Have they had any profit warnings? Is there any M&A activity? Any key changes in their C-suite?
- Check online credit sites – for instance Chaser, if you are a Chaser user. (link to Chaser Credit Check LP)
• Go to http://www.companieshouse.gov.uk/ and enter the company's name in the search box at the top of the page. You'll see a list of all companies that are registered with Companies House. Access public information from Companies House to learn about the company's financial history, including any late filings.
2. Talk to other customers or suppliers in the industry
• Make sure you let your business associate know how long it will take for a payment to reach them. They should then be able to pass that information on to their customer. This helps avoid the customer forgetting and waiting until it is too late.
• Check the average customer review before you put your money on the line.
3. Are they part of the Prompt Payment Code?
• The Prompt Payment Code is an initiative that businesses can voluntarily sign up to, with the aim of providing clear guidelines and targets for the payment of suppliers. By signing up to the code, businesses agree to pay suppliers on time within the terms agreed at the outset of the contract. If your prospect is signed up to the PPC, that can give you some clear comfort around their creditworthiness – and to their general attitude around prompt payment to suppliers.
4. Track their payment performance and take action when necessary
• With the due diligence, credit checks and background research done, you may come to the decision to take this prospect on as a brand new client - however the work does not stop there . You should monitor your client’s payment performance over time, to check their average payment times and see if there are issues or trends that need further action.
• Trying to keep track of all the chases you’ve done for every customer and invoice can be time-consuming and confusing. Seeing all your credit control activity in one place is essential to getting it right, which is the founding principle of why we built Chaser.
Do it all in one place: Chaser Credit Checking
Chaser’s newly released credit checking helps to streamline this entire process, by giving our users the ability to get full credit reports within the application.
These include the registration details of a business for verification, the credit score and recommended credit limits, and an in-depth look at the financial performance of a company. This empowers our users in the UK to make better business decisions, particularly when onboarding new customers.
Credit checking is an important step for Chaser, however it is only the beginning of this journey - in the coming months, we will be looking to expand the functionality further, deepening the integration with our user´s customers as well as the potential to expand to other regions.