If you provide goods or services on credit you are essentially operating as a lender and run the risk of not getting paid. Before you agree to trade you should evaluate the risk and take any necessary precautions to protect your business.
In our July newsletter we looked at the benefits of credit checking account applicants as well as current customers who are not paying on time. This month we focus on the most requested credit reports Ledger Guard sources from Dun & Bradstreet (Australia) and what information you can expect to uncover.
We also take a brief look at the PPSA 2009 which comes into force May 2011 and will have a significant effect on most businesses.
And, we introduce our client Pest Control Advantage to anyone who wants to be rid of unwanted pests inhabiting their residential or commercial property. Scroll down for more information.
Regards
Larry, Geraldine, Mike and Karen
Credit Check Or Risk Bad Debt What Credit Reports Are Available?
Commercial Bureau Enquiry ($10) - a basic report that includes legal verification of the company, public filings that are updated daily (such as collections, court actions and registered charges), the ASIC Company Extract currently on file (with directors' details including current and previous directorships, shareholders, share structure and the company's legal status) and past credit enquiries. With updated ASIC Extract ($45)
Payment Predictor Report ($60) - recommendedifyour credit exposure is likely to be between $3,000 - $5,000. Includes all the information on the Commercial Bureau Enquiry including an updated ASIC Company Extract plus a Dynamic Delinquency Score (DDS) which predicts the likelihood of a business paying in a severely delinquent manner (90 + days past terms) during the next 12 months. This score is based on all the relevant information stored on Dun & Bradstreet's database for the company including trade payment data
Payment Analysis Report ($100) - recommended if your credit exposure is between $5,000 - $10,000. This detailed report includes everything supplied on the Payment Predictor Report plus up to 12 months of trade reference information. The data shows the $ value of the monthly spend, the supplier's industry sector, credit terms and the speed of payments. Trade payment information is the most important data for predicting a company's ability to pay and will show you why a company has been given a particular DDS
D & B Report ($300) - recommended if your credit exposure is over $10,000. This is Dun & Bradstreet's most comprehensive report giving you a complete picture of your customer's financial health. It includes all the information on the Payment Analysis Report plus 3 years of financial ratios benchmarked against industry norms and a 3 year analysis of the company's financial position. This detailed financial information is collated by business analysts after conducting an interview with the company director. It will be available immediately if the report is under 6 months old, otherwise allow 3-5 days before delivery. Priority request ($500)
Business Name Extract ($60) - will confirm the legal entity (company, individual/s or trust) behind a business name. If it is a company you can order one of the 4 reports above. If it is a sole trader or partnership entity you will need to look at one of the 2 reports below. If a trust is involved you need to confirm the entity acting as trustee and if possible have a personal guarantee signed by one of the trustees.
Public Record Enquiry ($8) - is a basic credit report you can obtain on the individual/s behind a business without coming up against privacy issues. It is based on public data - 3 years of summons, 5 years of judgments and 7 years of bankruptcies so you can confirm if an individual has had any serious credit problems in their past. This is the only credit report you can access on an individual unless you have prior permission and date of birth.
Individual Bureau Enquiry (Apply directly to Dun & Bradstreet) - is the most comprehensive report available on an individual, but can only be accessed if you are their credit provider, you have their prior agreement and know their date of birth. You will see all the public data plus 5 years of commercial & consumer payment default data and 5 years of commercial & consumer past enquiries data. The report will also show if the individual is currently or was previously a director of a company and the status of that company (for example, registered, under external administration or liquidated.
Is Your Customer A Credit Risk?
We can help
When you provide goods or services on credit there is a risk you won't get paid. You must take steps to manage this credit risk or you could lose a lot of money or even risk losing your business.
The first step is to find out who you are dealing with and the quickest and most reliable source of information is on your customer's credit file. Their credit report will confirm the true identity of the business and its owners and reveal how they have been paying other suppliers. You need to know if there is any negative credit information on their file such as collections, summons, judgments, previous bankruptcies or company liquidations. Such information will give you the confidence to make an informed decision about whether you should extend credit and if so how much and under what terms.
Because your time is limited, you can use Ledger Guard to obtain credit reports on your behalf through Dun & Bradstreet's (Australia). You will have no ongoing subscription fees. You just pay for what you order. You give us a copy of your credit application or the name of the business you want to credit check and we will fax you a copy of their report in most cases within 10 - 15 minutes of ordering.
Contact Larry Brownson on 07 3260 7232 for more information on Ledger Guard's services - credit reporting, debt collection and credit documentation or to order a credit report.
Ledger Guard's website
Ledger Guard's
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Ledger Guard's Phone: 07 3260 7232; Fax: 07 3260 5456
In This Issue
Credit Check Or Risk Bad Debt What Credit Reports Are Available?
Did You Know?
Jump in SME Collapses
Personal Properties Securities Reform What Will It Mean For You?
Is Your Customer A Credit Risk? We can help
Introducing Our Client -
Pest Control Advantage
Did You Know? Jump in SME Collapses
Recent insolvency data reveals the number of Australian companies entering external administration has increased 19.4% from April to May with a total of 914 in May, 9.3% higher than 2009.
Jim Downey, from insolvency firm JP Downey & Co says there has been a definite increase in the number of wind up notices lodged by the ATO which has resulted in more insolvency work especially from the SME sector.
Insolvency experts are suggesting the transport, logistics, commercial property and importing sectors are currently facing the greatest risk.
Personal Property Securities Reform What Will It Mean For You
As of May 2011 you will have one national system for registering security interests, based on the Personal Properties Securities Act 2009.
Similar to the current New Zealand and Canadian systems, when you supply on credit you will be able to register a security interest in your goods or services and you should do so if you want to secure your customer's obligation to pay.
Your current retention of title clause will not work unless you register the relevant security interests. You will first need your customer's agreement which will require a new clause in your terms and conditions.
Look out for more information on the PPS system in Ledger Guard's future newsletters and contact us regarding your terms and conditions.
"All business owners will require Ledger Guard's services at some stage in their business lifecycle.
It is just a matter of whether you are proactive and utilise their services before they are required. I know if I had used Ledger Guard earlier it would have made my life a lot easier"
Pest Control Advantage is a licensed pest control and Termatrac credited operator based in Brisbane. David and his team provide prompt competitive services to home owners, property buyers, real estates, property managers, schools and business owners.
Their commercial and domestic services include general pest control treatments, annual timber pest inspections, termite treatments and termite barriers. Check out their creepy crawly website for more information.
So, if you have any unwanted pests in your home or garden or at your business premises call David on 07 3267 3903 or 0421 515 774 or
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
.
