With the Department for Business, Enterprise and Regulatory Reform (BERR) reporting that a record number of new businesses started up in the 12 months up to the beginning of 2008, Equifax believes that it is more crucial than ever that SMEs, and especially sole traders and partnerships, focus on maintaining a good credit rating. Equifax is, therefore, offering advice to SMEs on how to manage their finances through the credit crunch.
To this end they have come up with a guide on how to keep a good credit score yourself, while also alerting you to warnings sign that may be being given off by your customers. The key pointer are:
Pay bills on time, as businesses will be looking for early signs of difficulty
Monitor your own business credit profile
File accounts on time, as any delays looks like you may have something to hide.
Avoid County Court Judgments, as any firm monitoring your status will view this as an early sign of financial trouble
Conduct credit checks on all new accounts
Implement data sharing systems to monitor customers for signs of financial stress
Look for early warning signs, such as prompt payers suddenly falling behind on payments
If you suspect a customer or supplier is in trouble, run a credit check and reassess your relationship if necessary
Set strict deadlines on accounts that are continually overdue. Don't let unpaid invoices mount up
Conduct ongoing monitoring of all customers and key suppliers. Equifax Portfolio Monitoring helps businesses quickly identify potential bad debt and act quickly to prevent it
Beware customers who switch to new suppliers at the point they reach their credit limit with you. This is often a sign of problems looming.
