7:18 am, June 24, 2008
IN these challenging times, information group Experian has come up with seven ways to ensure your credit channels remain smooth.
Businesses use Experian to check upon clients’ risk profiles – and use the information to take action. This can include refusing new credit, calling in debt, or reducing credit limits or terms. A major issue in an industry where stock worth is high and lines of credit vital.
The group is therefore well placed to offer recommendations on how to maintain a good business credit score and a low risk profile. These include:
Pay bills on time. Deferring bills is a key indicator of a deteriorating cash position.
File annual returns and accounts on time. Late filing is a statistical indicator of failing companies.
Don’t focus sole on profit and loss. Look at your cash position too; if it’s ever-worsening, the business is heading for trouble.
Avoid CCJs. Even a single Judgement could be the excuse for suppliers to take summary action.
Watch your own finances. For smaller and new companies, ‘blended’ information will give an indicator of the business’ commercial activity.
Register with a credit reference agency. If you’re not, you may not be assigned a rating or risk profile, restricting access to credit.
Monitor your own credit business report. Look for early indicators of difficulties here.
Kirk Fletcher, Managing Director of Experian’s Automotive division, was behind the advice to dealers. ‘The steps to keeping themselves in good shape are simple. However, by not keeping an eye on their own business risk profiles, they could be giving other businesses a reason to treat them with caution.’
