Home » Industry PR

High risk: Over three million British companies in the dark over business credit

7/19/2007

Courtesy of http://www.creditsafeuk.com/

High risk: Over three million British companies in the dark over business credit

• Over three million* or 75% of British companies have never used a business credit referencing service
• Over a quarter of businesses that have used a credit referencing service have not used one for more than a year
• A quarter** of small and medium sized businesses fail as a result of the late payment of invoices

New research published today by Creditsafe, the business credit information experts, reveals that over 3.3 million or 75% of British companies are failing to protect their cashflow by using a business credit report, despite increasing numbers of company liquidations**.

Creditsafe's research reveals that even if companies are using credit referencing services they are doing so with alarming infrequency. Over a quarter (26%) of UK businesses that have used a credit referencing service have not used one for more than a year and a third of businesses (that have used a credit referencing service) have not used one for more than four months. Creditsafe warns that companies risk late or failed payments that could jeopardise the future of their enterprise if they fail to check the creditworthiness of customers, business partners and suppliers.

Small to Medium Sized Enterprise (SME) business owners and managers are putting their companies at considerable risk given a quarter of SMEs in Britain fail as a result of interruptions to business cashflow***. Three quarters (76%) of SMEs have never used a business credit referencing service, compared to just one-in-five (20%) of large organisations.

Simon Camilleri, managing director, Creditsafe UK, said: "Companies are putting their future financial security at serious risk by not assessing the creditworthiness of customers, suppliers and business partners. Particularly at risk are small businesses that cannot afford late or failed payments if they are to meet their obligations, such as paying employees, or meeting customer orders. Credit reference checks can help businesses agree appropriate credit limits to offer other businesses and the timescales they should allow for payment."

Industry sector findings
On an industry basis companies in the retail, health and leisure sectors are least likely to use credit referencing services, with just 14% using these facilities to mitigate business risk. Shockingly, under a third (27%) of companies in the financial services sector use these services, compared with 42% of manufacturing companies and 44% of businesses in the wholesale industry.

Industry	Businesses that have used a credit referencing service
Wholesale	44%
Manufacturing	43%
Construction/transport/ communications/utilities/mining	31%
Business/financial services	27%
Health/retail/hotels & restaurants/other community social	14%

Source:Creditsafe

Regional findings
Creditsafe's research reveals companies operating in Wales & West of England are the least likely to use a credit referencing service. Companies operating in Greater London and the South East are the most likely to have used a credit referencing service, with almost a third (27%) employing credit checking services.

Table One: Regional breakdown of companies that have used a credit referencing service

Region	Businesses that have used a credit referencing service
London & South East England	27%
Midlands	26%
Northern England	20%
Scotland and Northern Ireland	19%
Wales & South West England	16%

Source:Creditsafe

Simon Camilleri, continued:
"Business credit risk changes daily, indeed we register over 800 new CCJ's everyday. Therefore, monitoring the credit profile of your suppliers and customers should be a core business process, not just a one off exercise. Active credit management can help companies mitigate the financial risk they face, protecting revenue streams and cashflow. Utilising services such as those provided by credit referencing agencies can help companies avoid problems with cashflow or failed payments that can result in business failure."

Credit referencing services help company owners and managers mitigate risk by analysing the financial structure and creditworthiness of a business. Credit referencing services provide credit ratings and proposed credit limits that should be offered to customers and suppliers to mitigate risk, based on the company’s anticipated ability to pay. These services can also analyse an organisation's credit history, including details of Company Voluntary Agreements (CVAs), County Court Judgments (CCJs) against the business, invoice payment history or directors with County Court Judgments (CCJs) and bankruptcies to their name. Credit referencing agencies help businesses manage complex financial information, the scale of which is emphasised by the 7,500 sets of accounts filed each day and 10,000 company name changes registered each week.

Notes to editors

*Beaufort Research Limited conducted a telephone survey of 565 British businesses in April 2007.
**Source: Insolvency Service (latest figures published February 2007)
***Source: Federation of Small Businesses

For more information please contact:
Ewan Robertson
Citigate Dewe Rogerson
020 7282 2981

Stephen Fishleigh
Citigate Dewe Rogerson
020 7282 2981

Mathew Cory
Citigate Dewe Rogerson
020 7282 2859

Eagle Technologies Ltd remains the UK's only "trade only" multi-brand desktop card printer product distributor providing all leading card printer and consumables brands, plastic cards, badge holders/lanyards, in/out of warranty repair solutions (including onsite services), card badging software, and a comprehensive bureau card personalisation and fulfillment offering.

We sell only to resellers and add value by providing a variety of services. Our mission is to grow the business of resellers across the UK & Europe by providing the services and tools which make them more efficient, effective and successful. For example, save money, make money and improve your online presence with an eShop friendly product managed and fully maintained card printer website from www.Complete-ID.com From only £997 per year and live within just a few days!

Eagle customers have access to the industry's leading vendors, one of UK's largest product inventories, and the broadest range of value-added services available. There is only one focused trade only provider in the UK, Europe & Now the USA!

www.EagleTechnologies.co.uk T: +44 (0) 1344 303 700 F: +44 (0) 1344 303 701

www.Complete-ID.com www.Revolution.Complete-ID.com

ENDS

For further editorial information or a colour image, please contact Julie Richards at Publicity Overload, 45 Station Road, North Harrow, Middx. HA2 7SU. Tel: 020 8427 2320. E-mail: Please fax (020 8427 0264) or email () colour separation requests to Nila Jamil.

© 2010 Eagle Technologies Ltd. All rights reserved. Eagle Technologies Ltd reserves the right to make changes at any time without notice. All other names and trademarks are the property of their respective owners.

© 2010 Eagle Technologies Ltd. The content is for informational use only, is subject to change without notice and should not be considered as a commitment by Eagle Technologies Ltd.

Eagle Technologies Ltd assumes no responsibility or liability for any errors or inaccuracies that may appear in this documentation. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written permission of Eagle Technologies Ltd.