The best business credit reports provide an overall credit score and include the information you need to assess an organization’s financial health. It helps you make better decisions about doing business with customers, extending credit, and the likelihood of getting paid on time. Knowing how others see the financial health of your business can also help you when you seek credit or financing.
An organization’s financial fortunes can change quickly especially in an uncertain economy. Here are six reasons you should pull the best business credit report on your customers, suppliers, and business monthly to protect your business.
Checking Credit on Your Customers and Suppliers
The best business credit report can help you assess customers and suppliers.
1. Customer Financial Health Can Change Quickly
While bankruptcies have slowed in the first half of 2021, financial analysts expect another surge in bankruptcies in the second half of the year.
Once a bankruptcy occurs, your ability to collect on outstanding debts may be significantly limited or delayed—especially if the credit is unsecured. Unsecured credit does not require collateral and is common in business-to-business transactions. If you are an unsecured creditor when bankruptcy occurs, any money owed to you will not be paid until secured creditors, such as property mortgages or loans secured with assets, have been paid.
Before a bankruptcy occurs, signs of financial stress typically start to show. When you buy a business credit report on your customers or suppliers monthly, you see changes that may indicate financial trouble and take appropriate action.
2. Protect Your Cash Flow
Even long-term customers and established businesses can have difficulty paying their bills promptly. More than half of small businesses surveyed this year (59%) say they have seen a significant increase in late payments from larger corporations, non-profit, and public sector customers.
A monthly business credit report on your customers can help you uncover delinquency trends so you can better plan your cash flow. Knowing a customer tends to pay their bills past the due date can help you make better decisions about how much credit to offer and under what terms.
3. Protect Your Supply Chain
You should also do regular business credit checks on your suppliers. Maintaining a consistent supply chain is essential and you rely on suppliers or vendors to provide you with raw materials or products. If your supplier is struggling to pay their bills, they may not be able to get the raw materials they need to fill your order. This can leave you without products to sell or frustrate your customers with backorders.
Despite a better economy, the US Federal Reserve is reporting increasing supply chain disruptions. You need to know early if your suppliers are having difficulty fulfilling your orders. The best business credit reports let you check your supplier’s financial health before you commit to a purchase order.
Checking Your Business Credit Score
You also need to check your own business credit score regularly. A monthly check can help you identify any changes to your report that might impact your business.
4. Make Sure Your Business Credit Report Is Accurate
A study by the Federal Trade Commission revealed that one in five people may have some inaccurate information on their credit reports. If there is incorrect information on your business credit report, it might hurt your credit score and impact your ability to get financing or credit. So, if you find a mistake, you want to correct it as quickly as possible before it becomes an issue.
5. See How Others View Your Credit
You should also buy a business credit report for your business monthly to see how others view your creditworthiness. This knowledge can help you negotiate better rates or more favorable terms with your vendors or suppliers.
6. See Who Is Inquiring About Your Business
Credit inquiries can affect your business credit score, too. Hard inquiries get triggered when you apply for credit or a loan and will cause your credit score to drop for a period. Too many hard inquiries within a short period can indicate to lenders that you may be a credit risk. Soft inquiries, such as when you buy a business credit report for your company, will not be visible to others and will not impact your business credit score.
Buy Business Credit Report
Unlike a personal credit report, you do not need to get permission to buy a business credit report. Anyone can pull a credit report on a business.
You can get the best business credit report from the three major credit reporting agencies by visiting myaccredit.com. Compare reports from Experian, Dun and Bradstreet, and Equifax, view samples and download the best business credit reports instantly.