As the global economic situation fuels business uncertainty, many companies are experiencing a much slower cash flow than they would prefer, a result of late payments from customers. From cash flow issues to inefficient payment processes and the inability to choose from a variety of payment methods, B2B companies face a number of challenges with regards to the timely payments of invoices.
So how can companies ensure ahead of time that they are doing business with a reputable business that will pay on time and minimize the risk of late payments as much as possible? One possibility is by running a business credit score and report on new customers.
What is a Business Credit Score and Report?
A business credit score is a rating whose goal is to demonstrate how financially responsible a business is as well as its potential for profitability. The number and type of credit applications, payment history, history of debt, company structure and personal credit score of the founders or owners all affect a business credit score. A good credit score is essential for assisting a business in its ability to get funding, win contracts, save time and resources – and as a result of all of the above, stay ahead of the competition.
A business credit report is a detailed list of information about a business, including current and past debts, payment history, legal proceedings, and possibly credit ratings and risk assessments.
This financial information is meant to help a company understand the likelihood of a business paying its debts, commitment to business obligations, and the general risk your company may face entering into a business relationship with it.
Our Top 5 Credit Bureau Companies for B2B in 2023
Companies can only run a business credit report through a credit bureau that can gather the relevant information on their new customer, so it’s important to choose your credit report service wisely.
Here’s our recommended list in no particular order:
Among the credit report services listed here, CreditSafe is unique in that it focuses on delivering services to B2B businesses by offering credit information to over 365 businesses around the world. The company is strong in its ability to predict whether or not a business has the ability to pay its debt up to a year in advance, and its credit reports and limits are highly respected in the industry. In addition, the company boasts a customer retention rate of 95%.
Gaviti partners with CreditSafe as part of its Credit Application module, which facilitates the A/R credit management process for companies.
- Pros: Delivers credit reports to businesses in over 160 countries; easy-to-use interface; reliable data provides trustworthy insights into business’ financial situation
- Cons: Data may be limited when it comes to certain financial risks, regions or businesses in specific industries.; credit ratings need to be combined with other data to gain a complete picture of a business’ creditworthiness
Part of the UK’s reputable FTSE index, Experian offers credit ratings to both businesses and individuals and also helps protect them against fraud and other financial crimes. Its continually updated database delivers information to over 27 million businesses in the UK, including financial data, credit score and risk factors, collection history, past loans and bankruptcies.
- Pros: Offers additional services for businesses to protect against fraud, identity theft and unauthorized transactions; advanced analytics and decision-making tools; credit reports are quite detailed
- Cons: The premium service is not affordable for businesses with tighter budgets; it is reliant on the underlying data sources; the business software may require a learning curve
3. Dun and Bradstreet
With over 30,000 data sources in over 200 countries, this leading credit report provider offers extensive credit reports to its customers. Their variability rating is a noteworthy feature that assists in evaluating a business ’current and future performance, and its credit rating scores are determined based on both past and future financial forecasts.
- Pros: An extensive database of over 500 million records globally; detailed credit reports that facilitate informed business decisions; credit scores and ratings based on past and future performance
- Cons: Data obtained through the software requires due diligence to ensure accuracy; business software may require a learning curve; out of budget for some businesses
With offices in 25 countries, Equifax has a strong global presence in the credit report space, offering both individual and corporate credit reports, with a focus on SMBs. In addition to credit reports, it helps consumers and companies fight fraud, meet regulatory compliance and defend against identity theft. Many of their long-term customers attribute Equifax’s success to their commitment to their customer satisfaction and the personal relationship the company invests in them.
- Pros: International presence and strong expertise; a wide range of solutions beyond credit reports; and direct access to consumer and company data
- Cons: The company suffered a high-profile data breach in 2017 that exposed the information of 235 million users which makes new customers wary; is expensive for companies with smaller budgets; offers limited data and analytics which can be challenging for businesses focusing on a specific niche or segment of the population
5. RedFlagAlert (RFA)
Headquartered in the UK, RFA boasts a database of over 15 million businesses and more than 180,000 daily updates. As a cloud-based business intelligence software, it delivers data in real-time so that financial professionals can make the right decisions about sales, credit risk assessment and compliance for companies based in both the UK and abroad. Its data originates from top market-data business leaders, enhanced by AI-powered algorithms.
- Pros: In-depth information in real-time; offers the ability to access data anywhere; a data-driven approach that provides accurate information and offers better operational efficiency
- Cons: Data is only as good as its source; price is on the higher end; can take time for teams to become familiar with the software
Why is it Important for Businesses to Check Credit Reports?
It is important for businesses to check the credit reports because they help build trust with their suppliers, partners, external contractors and third parties. After running a credit check, a business has a better understanding of their customer’s history of managing and paying debt, and it can decide whether or not to pursue a business relationship with that party. In some cases, running a simple credit check helps to mitigate risk they would not have otherwise known about in advance.
How Gaviti Helps Manage the Credit Application Process
Automating the A/R process to reduce human error and inefficiencies is one of the best ways to decrease the number of late receivables, while also improving productivity of the accounts receivable department. Gaviti’s credit application management module does exactly this by automating the credit request process and offering credit checks at a discount, keeping real-time track of all credit requests and setting credit limits directly into the customer profile. This empowers companies to make credit decisions based on the most up-to-date information from a centralized analytics dashboard, helping to facilitate better trust among both companies and their customers. The result is a streamlined, transparent system that centralizes visibility – all building blocks of a solid foundation for enhancing the relationship with your customer.
Want to learn more about how you can automate the credit report process? Get a demo today.