Whether you’re a brand new small business or a more established SME, one of the main worries facing all business owners, has to be building up your credit score and avoiding getting into debt. Here’s a few tips to help you on your way…
1) Know your own credit score. It’s vitally important to be aware of how your company’s financials are reported when potential traders and customers are searching for you. If you don’t like the look of your credit score, are other people going to want to do business with you? If you’re looking for ways to improve your credit rating, take a look at our post on ‘how to get a better credit rating for your small business’
2) Be aware of your payment terms! Don’t get caught out by thinking you’ve got 6 weeks to pay a bill when it’s due in 4. This may count against you and other businesses could find out and not give you the credit terms you want, so keep on top of what’s due when.
3) On the flip side, when you’re investigating who to trade with, find out which company is likely to pay you on time. If they’re likely to renege on their payment terms, you can ensure you set shorter terms or limit the amount of credit you’re extending to that particular less-than-reliable company. Check out our ‘How can I tell if someone’s going to pay me on time’ blog for some more tips
It’s often bandied around at the moment, but the word ‘transparency’ is of huge significance when it comes to managing cash-flow, credit ratings and debt within any small business – so make sure you’re armed with all the tools you need and aren’t walking zombie-like into debt! Know your customers but most importantly, know your own business!
You can search over 7 million companies and register free by going to www.credithq.co.uk