Credit checking your customers and setting credit limits
Credit checking potential customers
If you don't know a potential customer's credit history, there is a risk of being paid late or not being paid at all.
You should ask all potential customers to complete a form authorising you to get bank, credit and trade references.
The form should include:
- The full name of the customer's business and any other names it trades under.
- Details of who owns - and who runs - the business.
- The legal status of the business, eg sole trader, partnership, limited liability partnership, public limited company. For more on the various legal structures, see legal structures for businesses - an overview.
- Registration number - if it's a limited company.
- How much credit is being asked for.
- Full contact details of the person responsible for payment queries.
- Delivery and invoice address if different.
- Bank account details.
- A request for consent to make bank reference checks.
- A request for consent to get a credit check from a credit reference agency.
- A request for consent to get at least two trade references.
You should then make the necessary checks with the customer's bank, a credit reference agency and their suppliers.