Business Credit Checks
Why Credit Checks Matter for Your Business
Running a business is tough enough without worrying about unpaid invoices. How do you know if a customer will pay on time or leave you chasing money? A business credit check helps you spot financial risks before they become your problem.
Skipping credit checks is like rolling the dice with your cash flow. A late-paying customer can put a serious dent in your finances, and chasing debts is a hassle no one needs. A quick credit check gives you the info you need to protect your business and keep your cash flow steady.
What Are Credit Checks?
A credit check gives you a snapshot of a person’s or business’s financial history. It tells you how they’ve handled debt in the past and whether they’re likely to meet future payment commitments.
Businesses use credit checks to figure out if a customer, supplier, or partner is financially reliable. When you know their creditworthiness, you can make smarter decisions about who to work with and on what terms.
What’s Included in a Business Credit Check?
When you request a business credit check, you’ll see key financial details, such as:
Payment history – Do they pay on time, or do they have a habit of missing deadlines?
Outstanding debts – Are they carrying heavy debts that could impact their ability to pay you?
Credit limits – What kind of credit have they been approved for elsewhere?
Legal judgments – Have they faced court actions, insolvencies, or bankruptcies?
With this information, you can make informed decisions about who you do business with.
Why Your Business Needs Credit Checks
No matter what industry you’re in, credit checks help you avoid unnecessary risks. Whether you’re signing up new customers, extending credit, or working with suppliers, knowing their financial health gives you an edge.
Avoid Late Payments and Bad Debt
Cash flow is king. Unpaid invoices create stress and wasted time. A credit check lets you spot high-risk customers before they become a problem, helping you decide whether to offer credit or ask for payment upfront.
Build Stronger Business Relationships
Reliable customers and suppliers make life easier. Credit checks help you partner with businesses that have solid financial track records, so you’re not left in the lurch.
Stay Out of Costly Legal Disputes
Chasing unpaid invoices through the courts is expensive and time-consuming. A quick business credit check upfront can save you from messy financial disputes down the track.
When Should You Run a Credit Check?
There are plenty of times when checking someone’s financial background is a smart move, including:
Before taking on a new customer
Make sure they can pay before you extend credit.
When choosing a new supplier
Check their financial stability so you’re not left without stock or services.
If a client wants a bigger credit limit
Review their financial history before increasing their credit terms.
Before entering a business partnership
Make sure potential partners are financially sound.
After a late payment
If a customer starts missing payments, it’s time for another check.
What If a Credit Check Raises Red Flags?
A bad credit report doesn’t mean you have to walk away, but it does mean you should be careful. Here are a few options:
Ask for upfront payment
No credit, no problem. Getting paid before delivery removes risk.
Adjust payment terms
Shorter payment periods or stricter terms can help reduce exposure.
Monitor their payments
Keep a close eye on their behaviour to spot any warning signs early.
Say no to the deal
If the risk is too high, it’s better to walk away than lose money.
Offer a structured payment plan
If they’re struggling but still want to do business, setting up a payment plan could be an option.
The Real Cost of Skipping Credit Checks
Some businesses skip credit checks because they seem like an extra step, but that’s a risky move. A bad debt can hurt your cash flow, eat up your time, and even impact your ability to pay your own suppliers. A simple check now can save you thousands in lost revenue later.
Imagine sending out a big order, only to find out your new customer has a track record of defaults. Suddenly, you’re out of pocket with no easy way to recover the money. That’s why a business credit check is worth the effort – it helps you avoid costly mistakes before they happen.
Protect Your Business – Get Started Today!
Don’t wait until you have a cash flow problem. Running a business credit check is a simple way to protect yourself from bad debt and financial stress.
We provide fast, reliable credit reports so you can make smarter business decisions. Get in touch today and find out how a credit check can help your business stay on track.
Frequently Asked Questions
When should we involve a professional debt collection agency?
This is one of the most common debt collection frequently asked questions!
Generally, after you have completed your internal collection activities. But as a rule not more than two “payment cycles”. e.g. if an invoice is due on the 20th of February, you should consider engaging a business debt collection agency on the 21st of March. This depends on your relationship with the debtor, and their previous trading history.
The great thing about our professional debt collection service is there is no risk or cost to you.
How long does the debt collection process take?
Unfortunately, there is no clear-cut answer. Sentinel has had payments received within hours of our first contact with debtors, and at other times it has taken over a year.
The majority of debts are collected within thirty days.
We keep you informed and updated on progress regularly.
Can you help with both personal and business debts?
Sentinel only engages in commercial debt recovery. There are, however many consumer debt collection companies New Zealand based.
If you are a business owed money by another business, and the debt is $1,000 or more, and your terms of service have a clause for adding collection costs, we can help you.
Have more questions?
We are regularly updated our frequently asked questions. You can find the full list here.