Businesses have increased their use of check-ups into clients and suppliers by threefold in the past year, keen to protect their cashflow and safeguard against bad debt.
Equifax, the data provider, said demand had increased by almost 200% for its alerts service, which monitors negative issues like credit or court actions against a business.
The company explained the subtext of the increased use in the service was business people switching on to the importance of early signs of potential repayment problems.
Equifax also saw a doubling in the number of reports that provide credit profiles on the individuals behind self-employed and non-limited partnerships in the last year.
The rise suggests a growing number of organisations are looking into the financial circumstances of people they are about to engage, particularly if their venture is new.
“In times when new credit is difficult to come by and banks are reducing or even recalling debts, there may be a temptation to cut spending on basic processes and disciplines,” said Equifax director Neil Munroe.
“But when times are tough cutting back on checks could be a false economy…even in a stable economy it may only take one or two important customers going bust to jeopardise a company’s own financial standing.”
FreelanceUK's credit check service can be found here.
Sep 1, 2009
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