Prevention Is Better Than Cure Is Definately Relevant To Business

We all know that prevention is better than cure.

The age old definition which means that it is better to stop something bad from happening than it is to deal with it after it has happened....  And yet with this knowledge a vast proportion of UK business do not credit check their customers. A staggering 72% of UK business do not carry out the important and necessary credit checks in any way shape or form.

Now, for the successful business owners, entrepreneurs and credit managers out there that use credit reference agencies on a daily basis it would seem ghastly to not carry these checks out.

However to new businesses and potential first time users of business information it may seem daunting to obtain third party information prior to extending credit terms and entering into a business relationships but it really isn't that bad... An online credit report is a simple to use, detailed document of information which will always assist in setting credit limits. It will include financial information, statutory information, ownership and group structure, derogatory information and recommendation.

Now the beauty of this type of information is that as well as being very detailed it is a cost effective solution to any credit control operation and is proven to reduce the risk of bad debt.

Prevention is better than cure has never been more apt than in the story of one of my new customers...

A business that has operated successfully for several years wanted to use our debt recovery operation to obtain payment for the goods and services provided to 'Company A'. Our customer had never used our credit checking facility or any other to help with setting credit limits, it was done on very much a 'face value' basis.

Upon receiving the information on 'Company A' to start proceedings we carried out a simple credit check which brought to our attention that 'Company A' had CCJ's already registered against them, however this was the tip of the iceberg as looking at the owner behind 'Company A' we also found out that he was previously a director of three other companies which had been put into liquidation...

Obviously this was bad news and this debt will be hard to recover, but the moral of this story is that if our customer had used a credit checking facility in the first instance they would have seen this information and not dealt with 'Company A' and never had this bad debt costing them several hundreds of pounds... 

Prevention is better than cure!

So if you are one of the 72% of companies not currently credit checking your customers, please think about the potential consequences of not doing so. For a small annual subscription you will be able to obtain quality business information to help avoid potential bad debtors.

For more information please feel free to contact me on LinkedIn - Martin Brown, Twitter @creditserve or email on martin@creditserve.co.uk or if you are like myself and prefer to still talk to people, please call 01992 414222.

Martin Brown
Creditserve Business Information Ltd