Company Credit Check What Can An SGP Tell You?

You may have your own company credit checking contract and be proficient using it and interpreting the information. If you are, save time as what follows is not for you.

Business/ Company Credit Check

For everyone else you will know that there are a number of online services offering cheap on-screen credit checks on companies. These may suffice if all you want is the brief overview and a “credit score” calculated by their algorithm. However, this really isn’t sufficient for you to base decisions to award sometimes substantial amounts of credit and it is also easy for owner-managed companies to manipulate their credit score. This manipulation can be as simple as taking their income as dividends rather than salaries, as it leaves the profit figure higher thus obtaining a higher score. The company balance sheet remains the same.

What makes SGPs Business/ Company Credit Check Different?

A credit-check undertaken for you by SGP is different in two main ways. Firstly it is a verbal credit check, with details given to you in real-time by our trained staff member. As they provide you with details, you may link this with what you know about the company and its’ Directors which could result in our staff member looking at their other appointments and group companies to give you a proper understanding of what information is available. Secondly, if our checking takes you into related companies then you are not charged for extra company checks as you would be with online services.

The key elements we will give you are:

  1. The company registration number – should they later change name this is the most important piece of information and you should obtain it from every company to whom you give credit.
  2. The names of its’ Directors and Company Secretary – we will also give a brief overview of them covering other appointments, whether they have a history of dissolved or insolvent companies etc.
  3. An overview of its’ most recent filed financial statements – in most cases this will just be a Balance Sheet since only the largest of companies now have to file profit & loss accounts.
  4. Details of any County Court Judgments (CCJ’s) registered against them, and whether or not these have been satisfied (paid).
  5. If you want it, a suggested credit limit and score. Bear in mind, this is based on an algorithm calculated by our information supplier and we do not suggest basing your credit decisions on it. Suggested credit limits may be in the £millions – clearly inappropriate if you are a small company yourself.
  6. The opportunity to ask questions about the information as we go along. Our staff cannot advise you on your credit decisions, only you can do that, but we can help make sure you base your decision on the right information.

Company Credit Check

When should I use a Business/Company Credit Check?

Also remember that it isn’t just necessary to credit-check a customer when opening a credit account for them. You should also do it if they are looking to increase their credit limit with you and especially if you notice they are taking longer to pay than in the past.  I would also recommend checking all customers with substantial accounts with you at least once a year.

The cost of a Business/Company Credit Check

A single credit-check from SGP only costs £15+VAT. Prepaid packages of 10 or 20 are available at lower unit costs, please call us to discuss your requirements.

Detailed Risk Assessment of Your Sales Ledger

If you would like a more detailed risk assessment of your sales ledger, company by company, then this can be undertaken for you and you will receive a written report with summary key financial information on your major customers. This can also be presented to you on site should you wish. We can also undertake this kind of review as part of a due diligence process if you are considering buying another business. Prices dependent on the extent of work requested and charged by the half day. The review will be undertaken by a qualified Chartered Accountant and can be performed at your premises or at our offices as you prefer.

Steve Fraser ACA – Finance Director

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