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New Business Credit Checks/Bad Debt ?

  • 14-07-2009 2:48pm
    #1
    Candidates
    Closed Accounts Posts: 2 ✭


    Hi All,

    We offer a range of services and request a direct debit and 12 month contract to be signed for all new business, but we are paranoid about accruing bad debit. A direct debit is no good if there is no money in their account.

    I have been trying to think of new business policies we could put in:
    • ESB/Bord Gais take a deposit from new business (tenant only, I think)
    • O2 charge you an extra month in advance.
    • Do a credit check (How accurate are these?)
    • Get credit insurance (8-10k for 12 months of invoices up to 500k)

    Anyone got any good ideas that we could use to try and insulate ourselves from bad debit ?

    Thanks in advance


Comments

  • #2
    blue4ever
    Registered Users, Registered Users 2 Posts: 1,257 ✭✭✭blue4ever


    Ran a business for a few years with an inherited debt problem. Normal Credit checks are ok! But if a judgement hasn't been reg against an individual, yet, they are useless.
    Get as much information on the individual as you can (driving Licence, Home address).

    If you do start getting a few, go for the neck. If you get a name for being soft on collection, i found, you will be walked on!

    The credit insurance looks ok (i am sure there are T+C's).It would suggest a debt ration of 2% which is ok - depending on your industry.


  • #3
    oscarBravo
    Technology & Internet Moderators Posts: 28,830 Mod ✭✭✭✭oscarBravo


    Is it a service that you can withdraw promptly? As an ISP, if a customer's direct debit bounces we have the option of quickly and easily disconnecting them temporarily, and permanently if necessary.


  • #4
    VO
    Closed Accounts Posts: 112 ✭✭VO


    We turn service off if a DD bounces and we do not get payment within 7 days of this. however, some of my competitors are happy to give 30-60 days credit.

    In a previous business I went in and seized the items I had supplied (desks & chairs ) as the customer had not paid for them 6 months later. We had retention of title in our t & c's so we were covered.

    I find credit checks are'nt worth the bother as quite often they are not up to date unless as stated above there are judgements registered


  • #5
    darc
    Closed Accounts Posts: 677 ✭✭✭darc


    we've used the cro to get latest company accounts for any company we give over €2k credit to.

    It costs 2.50 and its the best 2.50 you'll ever spend. A good accountant will review the figures in 2 minutes and tell you if they're a good / bad credit risk.


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