Menu
Credit information saves you time and money: you know who you are doing business with. Good credit information reduces the risk of non-payment. Check whether your potential buyers, both existing and new customers, are creditworthy before you do business with them. Prevention is better than cure.
In business terms, credit is capital provided to a company which must be repaid within a paid period. Therefore, if you supply goods and/or services to a company with a condition of payment (payment within x number of days), you are supplying on credit.
Checking the creditworthiness of potential buyers is evident to avoid non-payment. You want to minimise your debtor risks. Is my potential buyer, whether an existing or new relationship, creditworthy? Is the company financially sound? How is the payment behaviour?
Non-payment not only has a direct impact on cash flow and liquidity, it can even cause your business to run into trouble. Of course, you want to avoid that at all costs. So it is imperative to keep your debtor risks as low as possible.
Credit information is any information related to a company's creditworthiness. Based on this information, you can assess whether you consider it likely that your potential buyer will pay. You can collect information yourself and you can also request a credit report through specialised agencies.
Read here more on reducing the probability of non-payment with a credit information report and what the difference is between a credit limit from a credit insurer and a credit information report.
The first three points mentioned above concern objective information. The second three points mentioned above concern subjective information from insurers. This clearly characterises the added value of credit insurers. They are in direct contact with the companies themselves and process this information in a credit report.
You can read what credit information did for a well-known A-brand multinational in the retail & fashion industry here.
The importance and thoroughness of the 'Know Your Customer' principle is explained in detail here.
Xolv BV is part of of the Ecclesia Group
