Top 10 Tips For Successful Credit Control

This blog is suggesting what every business, small or large, should know about keeping their clients’ credit under control:

#1. Application forms
You need to know who you are dealing with, so get as much information about the business before you start doing work for them or selling them your products.

#2. Credit check
It is vital that you know the background of the company you are dealing with, this information can help you decide what credit limit to set or, more importantly, whether to refrain from dealing with potential delinquent debtors. You now have the ability with most credit reference agencies to 'monitor' companies and ensure that if anything changes to the company good or bad you are aware of the changes instantly.

#3. Set out your terms and conditions
This is your opportunity to clearly state your terms and expectations in your sales contract.

#4. Check references
There is no better way to get a sense of character than by word of mouth. Business associates will be genuinely pleased to sing the praises of good customers and conversely poor payers will be shown in their true colours.

#5. Set a credit limit
When you set a credit limit, stick to it! If a customer intends try and exceed the limit set it is time to re-assess the reasons why they require more credit - Has the company grown? are they no longer being supplied by another provider for late payment?.

#6. Payment chasing should be a tight operation
Having a system that runs like clockwork is essential, be sure to make a telephone call or send a letter on day that every invoice becomes due.

#7. Adding interest
You don’t have to put up with late payment. In 1998, business suppliers gained the legal right to charge costs and interests as per the Late Payment legislation.

#8. Employ an experienced credit controller
Or outsource to a company with expertise, don not leave the sales team or another member of staff that has little knowledge of credit control procedure to chase up your outstanding payments.

#9. Know your habitual late payers
Every company has the habitual late payers so keep close tabs on them. As soon as their account becomes overdue put on stop on it until the account is paid. If they start to make part-payments it is usually a sign that they could be in difficulty, so beware and again carry out further credit checks to ascertain current credit worthiness.

#10. Keep bounced cheques/documents/emails as evidence
Always keep records of problems and conversations as if there is a query with one invoice that is no reason to withhold payment of the whole account. Make sure that you sort queries as soon as possible. If at the end of the day you do have tried all of your resources and still not had payment it may be time to employ a debt recovery agency, it is often the case that these agencies carry out their services on a 'no collection-no commission' basis.

If you found this blog of interest and would like to receive further blogs from ourselves please follow our blog post page. You can also follow us on Twitter @creditserve, Connect on LinkedIn or our facebook page Creditserve Business Information Ltd www.creditserve.co.uk.

Implementing or Refining a Credit Control System

This blog is to assist or advise you as to what we believe is the most effective credit control procedure and there in to ensure you do all you can to get paid within your credit terms and what you may need to do with delinquent debtors.

Evaluating the credit worthiness of a potential customer

Carrying out an up to date credit report on all current and potential customers to ascertain whether they are credit worthy prior to extending credit terms is the best way to assess that your customer will pay.

• Credit Reference Agency
• Companies House Documents
• Trade References
• Bank References
• Site Visit

 Providing and agreeing to credit terms

When credit terms are extended there must be clear terms of trade agreed with each customer. This is to ensure that credit customers understand their obligations and to provide evidence for legal and court proceedings if necessary. 

Setting up internal systems

A healthy credit control department operates with internal systems such as invoices, statements and reminders to encourage payment on time. This shows a professional business manner and also indicates a no nonsense policy for potential late payers.

Also having a system in place so that should a debt become overdue, all credit controllers understand what is the next course of action also when analysing outstanding debts and identifying those that require further action.

Other alternatives

If and when all your efforts have failed to recover the monies outstanding you may need to employ a third party debt recovery agency to assist in recovering the outstanding debt value + costs and interests.

How Would We Define Good Credit Management

 
Firstly "A sale is NOT a sale until it is paid for" 

For many a small business the excitement of getting the long awaited big order is the whole reason they are in business. However, whether your customer is a small business or a very large one, it is important to make sure they can pay you. That is why their credit information is of utmost importance.

We see now that it is more common that large companies employing hundreds maybe thousands of people fail taking with them smaller companies in their wake, whether it be suppliers or customers whom rely on the 'blue chip' company to survive.

The aim of a credit reference agency like Creditserve is to provide you with reliable, accurate and yet inexpensive source of information and enable you to assess the suitability of your customers and suppliers and therefore minimise the risk of bad debt.

Below are some of the examples that we hear from companies whom expose themselves to bad debt, and really do not need to:

• We'll be fine they are a large Limited Company/PLC.
• We’ve heard they’re doing really well.
• They’re a household name. (Use Creditserve to check some household names) Whats the harm 
• They’re part of a large group of companies.
• Just look at their address - even the building is called after the company.

What must be deduced for the purposes of credit assessment is:

• Who or what are you dealing with?
• Where are they located?
• Do they have the money to pay?
• Are they prepared to pay to your terms?

We are able to offer a wide range of credit information packages which can be more cost effective than anticipated. To view these packages please feel free to vist www.creditserve.co.uk or contact sales@creditserve.co.uk or Twitter @creditserve

Credit Checking Non Limited Companies (Sole Proprietorships and/or Partnerships) and the Best Way to Ensure You Know Who You Deal With!

When dealing with Non Limited entities such as sole proprietorships or partnerships it can sometimes be tricky to know the information you require, how to obtain it and to be confident in setting a realistic credit limit or even whether you should give a limit at all.

With Non Limited entities the owner(s) are jointly and severally responsible for outstanding monies and in the case of outstanding debts any or all of the owners can be chased for the value plus costs and interest.

The starting point of credit checking your Non Limited customers and ensuring you know who you are dealing with is to have a full application form which require details such as company details, ownership details, residential address(es), bank details and trade references. It is also wise to make a note on the application form that consumer credit reports will be carried out with any application.

The next suggestion for credit checking your Non Limited customers would be to take up given trade references to ascertain details like how long your subject has dealt with the given reference, what credit terms they have (7 days, 14 days, 30 days etc), average purchases, credit limit and comments of the account.

In my opinion the best way of being confident of knowing exactly who you are dealing and whether they are credit worthy is to combine the two steps above with using both business information available online which will give you details on the business in question and also consumer credit reports which will give details on the business owner(s) behind the business. You can easily obtain information of electoral roll, CCJ and derogatory information, credit search history, demographic profile, address links and credit score via an online credit reference agency.

If you may need any further information or if you have any questions please do not hesitate to contact me via twitter @creditserve, on LinkedIn at Martin Brown or Email martin@creditserve.co.uk

Giving Credit Terms to Foreign Companies : European Credit Reports & Business Information

Does your company deal internationally?

If your company deals with European or International suppliers and/or customers it can often be a treturous proposition, as often you may not realise what is available help minimise the risk of dealing with these companies.

One of the misconceptions is that foreign companies do not file the same degree of information as we do in the UK, this is a potential problem in itself because if you do not try and achieve the best data available you are already leaving your company open to the possibility of bad debt.

European or International credit reports and business information is now available on-line via credit reference agencies such as Creditserve and is often very cost effective and detailed.

European credit reports for the most part contain statutory information, company accounts, derogatory information, group structure, share holder information director information and credit limit and risk score. All of these pieces of information are compiled into a credit report which is easy to read and will help you make a informed credit decision.

The countries which you can obtain on-line credit information are:-

Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Lithuania, Malta, Netherlands, Norway, Poland, Slovakia, Spain, Sweden, Switzerland and USA.

The European and International credit reports are often used by UK companies who deal with UK customers but in-turn have parent companies overseas and therefore would need to know group strength as well, as this may have implications on the UK subsidiaries.

The European and International credit reports can be obtained on a pay as you go service or within bulk packages from websites like www.creditserve.co.uk and are very cost effective easy to download.

I have attached a sample European credit report which will give you an insight into the degree of information available within these reports.

If you have any questions relating to European Credit Reports please do not hesitate in contacting me direct via martin@creditserve.co.uk, @creditserve or LinkedIn Martin Brown

Weighing Up Risk Vs Reward - Business Credit Reports

Risk Vs Reward?

When operating a business whether as a business owner, director or head of department there are several things when extending credit or entering into contract with suppliers that we need to think long and hard about.

With the recent news of large blue chip organisations such as Jessops and HMV and last years news of the likes of Comet and JJB failing there has been more emphasis on credit checking and monitoring your customers. Here are a few reasons as to why this is a prudent course of action within any accounts department whether it be for an SME or blue chip company:-

Why should we credit check our existing and potential customers?

Your existing and potential customers along with suppliers need to have business credit reports carried out on them to ensure that you do all you can to make sure you will be paid and also to maintain a secure supply chain.

When do we do a credit check?

A business credit report should be carried out at the point of when the application for credit is generated. This is also wise when setting up new suppliers.

Who offers business credit reports?

There are a whole host of credit reference agencies which can provide business information. Information can be available in different degrees of detail, and most agencies offer PAYG or subscription offers to suit.

What information is available in business credit reports?

The main points of a business credit report on limited companies is the fact you are able to attain the latest financial accounts for the company along with director details, group structure, derogatory information and credit limits to assist you with your decision.

Is there any way to ensure that if information changes I receive updates?

Along with business credit reports most credit reference agencies provide systems such as our monitoring system which sends email updates of any relevant changes on any company which is on the monitoring list.

How much do these credit reference agencies charge?

Some credit reference agencies charge dependant on usage, others on what degree of information the customers require, however the best way to obtain the best quotation is to shop around, trial systems and see which system suits your requirements best. Many providers offer unlimited packages where required covering a range of different services such as business credit reports, consumer credit reports, international credit reports, Companies House documents, debt recovery services, marketing data amongst other services.

If you would like to know anymore about business credit reports then please do not hesitate in emailing me on martin@creditserve.co.uk or Twitter @creditserve or LinkedIn Martin Brown

Business Credit Reports : Does Your Business Offer Credit Accounts?

Business Credit Reports.

If your business offers credit accounts then one of the most beneficial sources of securing your own ledger is to carry out business credit reports. These reports are key to understanding your new and potential customer's credit history.

Many small or medium sized companies offer credit terms under the illusion that they will be paid come what may. However this is not always the case and business credit reports are a quick, easy and very cost effective way of being aware of the potential delinquent debtors out there.

There has been a marked increase in companies using business credit reports since the financial downturn, with business owners and professionals seeking more guidance when assessing a both current and potential customers credit-worthiness. These business credit reports are available as one off reports or within packages which can be very beneficial when dealing with varying legal entities.

Company Monitoring

Company monitoring is a very helpful tool when either setting credit limits or reviewing current customers. This tool allows you to simple add companies to a monitoring list and receive live email updates relating to derogatory information, credit limits, risk scores, change of directors, company accounts and other information which will assist you with keeping your ledger as secure as possible with the most up to date information.

Creditserve are able to offer the above services within packages to suit and can guarantee to reduce your annual subscription whilst also being a major provider of quality information to many industries both in the UK and Internationally.

How to carry out a business credit report and what does one look like? Please visit www.creditserve.co.uk for more information. Also follow us on Twitter @creditserve or LinkedIn Martin Brown.


 

This blog is to give an insight into the main reasons for business failure in the UK.

Business Failure.

Start up businesses have a very high failure rate in this country with as many as 1 in 3 failing in their first three years. The reverse side of the coin is that around two thirds survive and some go on to prosper and expand. Key reasons for business failure include:

Poor marketing:-

Successful modern businesses are ones that understand and meet the requirements of their customers. Detailed market planning and market research is therefore an essential for new businesses, to find out details such as the potential size of the market, the extent of competition, as well as customer preferences and tastes.

Cash flow problems:-

Many businesses struggle through poor cash flow management. It is all very well having a good idea and a good product but it is also necessary to be able to meet short term cash outflows. Many businesses try to grow too quickly, and end up borrowing too much money externally, resulting in crippling interest repayment charges.

Poor business planning:-

Business planning should cover aspects such as marketing, finance, sales and promotional plans, as well as detailed breakdowns of costings and profit predictions. It is often said that 'failing to plan, is planning to fail'.

Lack of finance:-

Insufficient finance often means that businesses are unable to take opportunities that are available to them, or have to compromise - going for high cost solutions to problems, rather than lower cost ones that would yield greater competitive advantage.

Failure to embrace new technologies and new developments:-

In a fast changing world leading businesses are ones that make best use of advanced modern technologies in an appropriate way. Firms that operate with outdated technologies and methods frequently find themselves at a cost disadvantage over more dynamic rivals.

Poor choice of location:-

Location is a very important business decision. A good location is one that appeals to large numbers of customers, while at the same time minimising costs. For example in retailing it is often a mistake to choose a low cost location, that is not visible to customers. However, conversely there are considerable cost advantages to out-of-town retailers that customers are prepared to travel to visit.

Poor management:-

Weak and inexperienced management is one of the major causes of business failure. Managers have to work extremely hard, and to understand their customers needs, and the business that they are in if they are to be successful.

Poor human resource relations:-

Often a cause of failure. Successful businesses motivate their employees to work hard to help the business to succeed.

Lack of clear objectives:-

Successful organisations have clearly focused and communicated objectives that enable everyone in the organisation to pull in the same direction.

This Blog was written by Martin Brown of Creditserve Business Information Ltd www.creditserve.co.uk on 14th January 2013
Follow us: Twitter @Creditserve @creditserve1 or LinkedIn Martin Brown

10 Reasons To Carry Out Business Credit Checks

The challenges of operating a business in this day and age are varied and many. However there are some easy ways to make running a business an easier and more profitable. Nothing provides a business owner with more accurate information, than the credit reports of his/her competitors, vendors, and partners.

Therefore, when it comes to protecting your business, one of the most important things you can do is to run credit checks on the businesses that you interact with, or compete against.

Business credit reports are one of the best ways to assist you in achieving a obtaining information on your next potential bad debt and therefore allowing you to make sound business decisions. In fact, a business owner can take advantage of a host of benefits just by taking the time to check business credit reports.

I have listed below the top ten reasons to carry out business credit checks:-

No.1 – Checking a business’s credit report will provide you with the confidence you need when choosing whether or not to supply to or be supplied by another company.

No. 2 – A business credit report provides you with in-depth knowledge on how a company manages its financial responsibilities. A simple business credit check will assist you in identifying whether a company meets its financial obligations.

No. 3 – If a company is suffering from financial or legal trouble, its credit report will tell you. This will assist you in protecting your business from unreliable suppliers, or potential/delinquent debtors.

No. 4 – Finding out whether or not a company has past judgments, legal notices and/or bankruptcies will help ensure your business is not becoming a part of a business relationship that could reflect negatively on your business.

No. 5 – Monitoring your customer’s credit rating will help you ascertain whether the company in question is of lesser or greater risk than previous business credit reports show, therefore giving you the most up to date information to work with.

No. 6 – If you rely on certain suppliers for your business, then monitoring them and following their credit activity can help when making business decisions and allowing you to be sure of mind when entering into business relationships whether for the first time or on a regular basis.

No. 7 – Checking credit ratings for businesses will help you minimize the chances of having to pass cases to collection agencies. Business credit checks give you the information you need to make more informed decisions.

No. 8 – Checking the business credit reports of your competitors will help gain valuable knowledge and to keep a keen eye on their progress, therefore allowing you to keep your business in a positive position within your company sector.

No. 9 – Carrying out regular business credit reports on your own company is important, because it gives you a look into what other businesses are able to see when they check your business. View your business through your customer, supplier and lenders eyes, be realistic and keep an open mind.

No. 10 – Staying up to date and monitoring with your own business’s credit reporting information is important for reducing risk, making better business decisions, and taking the necessary steps to improve your own credit rating. Making this a regular task is also helpful in noticing the subtle signs that your business’s finances may be starting to be affected.

If you require any further information regarding any services we provide in assisting you with any or all of the details above please visit www.creditserve.co.uk

Post by Martin Brown 11/1/2013

Balance Sheet - What is a Balance Sheet?

Definition of Balance Sheet:-

 

The Balance Sheet is a financial statement that shows what the business is worth at one point in time.

 

A standard company Balance Sheet has three parts, assets, liabilities and ownership capital.

The purpose of the Balance Sheet is to give users an idea of the company’s financial position along with displaying what the company owns and owes. It is important that all investors, suppliers and/or customers know how to use, analyse and read this type of document.

Balance Sheet accounts do not show results, even if one can infer this by comparing the balance of accounts from different times.

How the Balance Sheet Works:-

The Balance Sheet is divided into two parts that, based on the following equation, must equal each other, or balance each other out. The main formula behind balance sheets is:

Assets = Liabilities + Shareholders' Capital

As the Balance Sheet is a snapshot at a single point in time of the company’s accounts - the Balance Sheet, along with the income and cash flow statements, is an important tool for investors, suppliers and/or customers to gain insight into a company and its operations.

 

Further information is available via http://www.creditserve.co.uk/Products-and-Services/Company-accounts where you can obtain full information on all Companies House documents including Annual Accounts, Annual Returns & Change of Director.

 

Creditserve are able to offer these documents on a one off 'pay as you go' service or within packages including on line business credit reports, international credit reports and/or debt recovery.

 

Should you wish to discuss any subject relating to this blog I would be more than happy to help.

 

This blog was written by Martin Brown on 7th January 2013

@creditserve

 

 

 

Online Business & Company Credit Reports for the United States of America / USA & Europe....

If you are looking for Instant Online "Pay as You Go" or "Per Report" Business or Company Credit Reports for Companies in the United States of America / USA or most of Europe, then please take a look at our online Credit Report shop.

The online Credit Report shop allows businesses all over the World, including in the UK, Europe or America / USA, Canada, Australia, New Zealand, South Africa, Dubai, Hong Kong (& anywhere else around the world) to purchase detailed Credit Reports on any business or company within our online American / USA and European Database.

If you can't find the American, USA or European business or company report that you are looking for online, you can also order a fresh investigation international report from our offline service (by ordering online).

To look for the American / USA or European business or company that you are looking for please use our online UK, European or USA company search via our website (links in side bar).

If you have any questions please see our website (out of hours) or call 0044 (1992) 414222. 

Corporate Debt Recovery and Collection advice for Businesses in 2013...

If you are looking for some commercial debt recovery advice for 2013 then please find an interesting article on our commercial debt recovery blog:

http://creditservecommercialdebtcollection.blogspot.co.uk/2013/01/when-considering-what-advice-to-give-in.html

You can also read more about commercial debt crecovery on our commercial business services website or alternatively you can call us on 01992 414222.

Credit Control Tips for 2013

If you are looking for Credit Control Tips for 2013, we posted in interesting Tip on our Corporate website (in the blog section of our media page) and also on our Corporate Blog.

The article gave tips on how to safely open up a new credit account and the process you should follow.

Should you want to read the full article please visit: http://www.creditserve.co.uk/Media-Centre/Blog/January-2013-1/Credit-Control-Tips-for-opening-a-new-Credit-or-Cu

What Happens When a Company Goes into Liquidation?

What Happens When a Company Goes into Liquidation?

When a company goes out of business, it will go through the process of liquidation, which involves converting all of its assets to cash and then distributing them to the various stakeholders, including lenders and equity owners. The entire process of liquidation can take several years, and it may sometimes be difficult for a business to receive the full value of its assets.

Winding Up

The first step in the process of a company's liquidation is the winding up of its business affairs. A company that makes the decision to go out of business typically cannot simply close its doors that same day. Generally, companies have long-term commitments and relationships that must be concluded before the company can completely cease its existence as a going concern.

Asset Liquidation

Once a company has wound up its affairs, it must then convert its assets to cash. These assets can include the equipment used in the company, the land and buildings the company uses and any remaining inventory or raw materials. It is rare that a company will be able to liquidate its assets for their full true value. This is particularly the case when the company has specialized assets such as equipment used to produce a specific product.

Repayment of Creditors

Once the assets of the company have been converted to cash, the company must pay off any debts it still has outstanding. Lenders are ranked in a hierarchy depending on how subordinated their debt is. At the top of the hierarchy is the lender whose debt is not subordinate to any other lenders. Once that lender is repaid, the remaining assets are used to pay the other creditors in order from least subordinated to most subordinated.

Distribution of Remaining Assets

After all debt has been repaid, any remaining assets belong to the owners of the company. Those owners have rights to the remaining assets in proportion to their level of ownership in the company, in the absence of any valid agreements otherwise. If different classes of stock are involved, preferred stock is repaid before common stock.

If you are in need of any further information regarding business information or debt recovery assistance Creditserve Business Information have several services that can assist you in securing you sales ledger or recovering any outstanding monies due to you. Please feel free to visit our website www.creditserve.co.uk.

Blog written by Martin Brown on 4th January 2013.

Why Use Company Monitoring on UK & Irish Limited Companies?

This is a quick Q & A about company monitoring and the reasons and benefits for using this type of services by Creditserve Business Information Ltd:-

Q1. What is Company Monitoring?

A. Company Monitoring is an automatic system which allows suppliers to stay up to date with information which becomes available on their customers.

Q2. Why use Company Monitoring?

A. Company Monitoring is used as a form of data gathering on your customers so that if their credit rating changes for better or worse you will be made aware of the changes as soon as the information is available.

Q3. What information updates can I receive when using company monitoring?

A. You can Monitor any Limited Company in the UK & Ireland for any of the following types of information: CCJ & Derogatory Information, New Annual Accounts, New Annual Returns, Credit Limit Change, Risk Score Changes,  Director Changes & Change of Registered Office.

Q4. How often do the Company Monitoring updates get sent, and how?

A. The Company Monitoring updates are sent by email daily on any Limited Company which has information changes on them, so there is a live feed of information. Therefore you have the ability to stay up to date with any changes on all of your customers.

Q5. How many companies can we add to Company Monitoring?

A. We offer unlimited monitoring capabilities for all UK & Irish limited companies, all you need is the correct company name and/or registration number.

Creditserve are able to offer unlimited monitoring as part of our Gold or Silver Packages available via http://www.creditserve.co.uk/Online-Shop or should you require a more in depth quotation please feel free to call 01992 414222 and I would be happy to discuss all of our products and services with you.

If there are any further questions you have relating to Company Monitoring or if you have any questions regarding Credit Reporting whatsoever then please do not hesitate in contacting me at martin@creditserve.co.uk or please follow me on twitter @creditserve for more interesting company information.

Kind Regards

Martin Brown
Creditserve Business Information Ltd