Benefits of credit checking suppliers

26 November 2021 Posted by: Sarah Brown Business News Resources
Benefits of credit checking suppliers

Credit checking suppliers can be beneficial to your business, as it helps you to identify and manage risks in your supply chain – before they become a problem. 

Every New Zealand business has a credit score between 1 – 1,000. The higher the score, the lower the risk. Running credit checks on existing and new suppliers helps you to determine their potential longevity. A low credit score is a sign a supplier may not go the distance, leaving you with supply chain and operational issues if you are relying on their products to do business.

Businesses with high credit scores are 15 times more likely to maintain healthy cashflow and are likely to remain in business much longer than a company with a low credit score. Yet despite this fact, very few Kiwi companies understand the benefits of regularly credit checking their suppliers.

Introducing Business Credit Reports

Centrix Business Credit Reports give you information that helps you to assess risk for new supplier arrangements. The reports give you deep insights into a company’s past credit behaviour, a summary of frequency and time frames of credit enquiries, type of accounts and/or dollar value businesses have previously applied for – delivered in an easy-to-read format.   

Reports feature a credit score for the business – a summary of the information in the report, designed to provide a snapshot of creditworthiness. The credit score helps you predict the likelihood of suppliers defaulting or failing in the next 12-24 months. The lower the number, the higher the risk. By having this information in advance, it can help you protect your future business.  

Monitor your supply chain

It’s also useful to monitor your supply chain by running regular credit checks on your existing suppliers, to identify any changes in their credit score or financial position such as missed payments, declining credit scores or hardship indicators. You can set up tailored alerts for your suppliers to monitor changes as they happen and avoid risk to your cash flow.

Cost-effective credit checking

Checking your suppliers’ credit report, credit score and recent payment history can help you to identify and manage any at-risk accounts early, to improve your supply chain security.

You can access business credit reports for New Zealand companies online from Centrix, through a simple self-serve portal or API integration. These reports contain up-to-date information about the payment history of most companies actively trading in New Zealand and a business credit score, which is a summary of the information in the report.

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