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Importance of a Company Check

A Company check is an essential commercial tool. With new businesses springing up in the UK at over 400,000 per year investors, quite rightly, like to know how they are doing before they will offer finance for further growth. Suppliers to any business need to be reasonably sure that they will be paid for their goods or services and consumers may wish to get some details of a business before they purchase from it. In years gone by that meant a lot of word of mouth advertising, not a bad thing, expensive searches by private investigators or a willingness to take pot luck. The term ‘Company Check’ was not then in common usage.

The idea of credit checks or getting a credit reference was something done by banks or building societies before they loaned you money and they tended to arrive at a figure guided by wages/salary and any outstanding overdrafts without a lot of emphasis on ability to pay or in the case of a company check how many defaults they had. To perform a modern company check UK firms take as many financial aspects of a person or company that are available, including record of payment and ability to pay, to provide a comprehensive credit rating.

Many businesses have their own credit management teams to ensure that

  • Their own credit rating is at an appropriate level
  • Customer credit is kept within strictly defined limits
  • Credit insurance is provided where necessary

These teams will produce status reports, another term for a company check for their own sales and management teams giving information, if available, on how long it takes existing customers to pay invoices, how long their own business takes to do the same, and when asked will investigate the credit worthiness of prospective customers. The information they use is mostly available from public records and can be gained from the likes of Companies House, The Register of Judgements, Orders and Fines, the Thomson Directories, Yellow Pages and official journals such as the London Gazette. Any or all may be consulted to produce a rounded company check with a factual background. No more guessing.

Smaller businesses and individuals tend not to be able to afford to run a full team so rely on purchasing a company check from one or more of the many credit information companies on the market. The majority of these companies offer instant or fairly quick online company checks. The quality and price of this online company check varies, with some suppliers giving a credit score, while others will give full company credit reports including details of accounts, directors, comparative performance and current status reports. As well as dealing with limited companies there are many non-incorporated businesses, sole traders and partnerships which are dealt with in a similar fashion in business credit reports. The information in the credit reports is gained from much the same sources as the credit management teams use but, as they are preparing the information for a more general use a certain care and uniformity must be used when preparing things like credit scores and even suggested credit limits.

To be of any value to the customer the credit report company must make these a company checkeasily accessible. A business search engine, either by name or registration number, is a necessity for customers trying to find a company or business online. The ability to purchase various different kinds of company checks as well as documents and reports stored at Companies House is also beneficial. A customer can go online now to do a company check.