The majority of UK businesses never check the creditworthiness of new customers, according to the latest research published today.
The survey of 700 business by the Better Payment Practice Group, discovered a staggering 63 per cent did not undertake any check ups on whether new clients had a good record of paying on time or not.
The findings also indicated there was a lack of connection between the sales and credit management function within businesses.
The BPPG warned, without up-to-date information on the business performance of potential customers, companies were exposing themselves to unnecessary risk when granting trade credit.
“This a very worrying statistic – a sale is not a sale until it is paid for,” said Stephen Lewis, BPPG member and representative of the Credit Services Association.
“Businesses must do more to practice sound credit management and credit checking is a fundamental first in controlling the financial risk of late payment.
“The information is inexpensive and readily available and we urge all business to use the sources open to them,” he added.
