| 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 September 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.
Simon Streat, managing director of
Experian’s UK SME business, said:
“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.”
Factors such as incomplete accounts, a
location change, the move from non-limited
to limited status, or mergers and
acquisitions, can all influence credit
scores.
LINKS:
Business Link guidance to getting paid on
time
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