checkSURE offers Company Checks
Company Checks
With new businesses springing up in the UK at over 400000 per year investors, quite rightly, like to know how they are doing before they will offer finance for further growth. Suppliers to any business need to be reasonably sure that they will be paid for their goods or services and consumers may wish to get some details of a business before they purchase from it. In years gone by that meant a lot of word of mouth advertising, not a bad thing, expensive searches by private investigators or a willingness to take pot luck. The term Company Checks was not in common usage.
The idea of credit checks or getting a credit reference was something done by banks or building societies before they loaned you money and they tended to arrive at a figure guided by wages/salary and any outstanding overdrafts without a lot of emphasis on ability to pay or in the case of company checks how many defaults they had. To perform a modern company check UK firms take as many financial aspects of a person or company that are available, including record of payment and ability to pay, to provide a comprehensive credit rating.
Many businesses have their own credit management team to ensure that
- Their own credit rating is at an appropriate level
- Customer credit is kept within strictly defined limits
- Credit insurance is provided where necessary
These teams will produce status reports for their own sales and management teams giving information, if available, on how long it takes existing customers to pay invoices, how long their own business takes to do the same, and when asked will investigate the credit worthiness of prospective customers. The information they use is mostly available on public record and can be gained from the likes of Companies House, The Register of Judgements, Orders and Fines, the Thomson Directories, Yellow Pages and official journals such as the London Gazette. Any or all may be consulted to produce rounded credit checks with a factual background. No more guessing.
Smaller businesses and individuals tend not to be able to afford to run a full team so rely on purchasing credit checks from one or more of the many credit information companies on the market. The majority of these companies offer instant or fairly quick online company checks. The quality and price of this online company check varies, with some suppliers giving a credit score, while others will give full company credit reports including details of accounts, directors, comparative performance and current status reports. As well as dealing with limited companies there are many non-incorporated businesses, sole traders and partnerships which are dealt with in a similar fashion in business credit reports. The information in the credit reports is gained from much the same sources as the credit management teams use but, as they are preparing the information for a more general use a certain care and uniformity must be used when preparing things like credit scores and even suggested credit limits.
Using information on profitability, interest cover, capital gearing, liquidity, company size, industry, whether a firm is a subsidiary and overall economic conditions a Bank of England study showed that an accurate credit scoring system could be devised. This is used in many company checks and is a valuable tool as only factual analysable details are use to compile this credit score.
To be of any value to the customer the credit report company must make these credit reports easily accessible. A business search engine, either by name or registration number, is a necessity for customers trying to find a company or business online. The ability to purchase various different kinds of credit reports as well as documents and reports stored at Companies House is also beneficial. A customer can go online
- Do a company search. This will generally give
- Company Name,
- Registered address
- and, if applicable, Company Registration Number.
- If this is the correct company/business, a credit report can be purchased which may give you more information names of known directors past and present in some cases, perhaps a list of major shareholders, and even some financial background on the firm, accounts, mortgages and charges, current County Court Judgements etc
- The report may also have a Credit Score and suggested credit limit for that company.
You are now much better equipped to make a decision on whether or not to deal with company/business.
After doing the company search you may prefer to rate the company yourself and want to purchase the annual report or annual accounts of a company. Many of the credit report companies will be able to sell you these documents taken direct from Companies House where they are filed. Other documents available from Companies House are New Incorporation Documents, addition or resignation of directors or secretaries, change of name of companies, notices of dissolution etc.
If you are dealing with a non-incorporated business, the financial information filing requirements are not so great for them and therefore the reports on them will tend to carry a lot less information. These business reports often come without a credit score or suggested credit rating because there is no factual information to back this up. You will generally get proprietor’s name, trading address, telephone number and number of staff employed which can of course be of assistance when trying to gauge a business’ worth. You wouldn’t necessarily want a building firm with only one employee to build a new house for you whereas you might use them to build a garage or small extension.
In many cases you may be dealing with an individual and you are not sure of his/her background, or you know that they are involved with more than one of the companies you are tracking. Some of the credit report companies can also supply you with a report on individuals who are directors of companies. The reports will tend to deal with the individual in relation to their directorships rather than their personal credit rating but a great deal of information can be gleaned from these credit reports. You may end up getting information on more than one company which of course can save purchasing multiple company checks.
These credit check reports with a choice of company checks, business check, and in some cases an individual check are now tools of our society. As long as they are used properly they will work. They are only a guide, an informed one no doubt, but a credit report should never totally replace the human element. Personal knowledge should always take a high priority in any business dealing.
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