Almost three-quarters of small and medium-sized UK businesses are failing to check on their customers’ creditworthiness, according to new research.
Global information services company Experian surveyed nearly 700 UK small businesses and found that 71 per cent did not check their customers’ credit status, increasing their risk of being paid late or not at all.
The recent survey also found that 39 per cent of small businesses did not know what a credit score was and 61 per cent have never checked their own score, leaving them unaware of issues that could lead to them being turned down for finance or refused materials by a new supplier.
Experian said that for small businesses, low scores can stem from a lack of detailed data about the business or a failure to file complete or accurate information, rather than underlying financial insecurity.
Two-thirds of small businesses may be blind to their credit scores, but their larger customers, suppliers and banks certainly won’t be.
It is important for businesses to monitor their credit score on a regular basis to ensure it reflects their situation accurately and to be able to take action to resolve any issues that are highlighted.
Simply taking the steps to check the credit score of firms before doing business with them is straightforward and affordable, and it could make all the difference.
For further information about how to manage your credit score please contact Chris Brown, Business Recovery & Insolvency Partner at Hart Shaw on T: 0114 251 8850.
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