Checking contractors is a natural practice included in business

Service Business

External article

Author: Diana Borowiecka, BIG InfoMonitor

Business risk assessment is becoming very important nowadays. Verifying clients and contractors can save companies a lot of trouble related to debt enforcement and fraud prevention. Especially when companies are constantly acquiring new customers with whom they cooperate. With a large number of contractors, it is impossible to protect yourself from concluding a contract with someone unreliable. Therefore, the only sensible solution is to check potential business partners.

Risk under control

Today's highly competitive business world requires managers to make quick decisions that give them an advantage over market rivals. Taking over a company or acquiring a new customer may provide the desired increase in value, but may also lead to losses resulting from inappropriately selected business partners. Making decisions only on the basis of declarations of the other party is burdened with high risk. What if the information provided turns out to be false? In order to reduce this risk, the manager should obtain as much knowledge as possible about the real, and not the declared, state of affairs. There is a large group of people on the market who earn extra money on human naivety. It is therefore worth checking their financial credibility. You have to take care of it already at the stage of establishing business relations. Industries particularly exposed to this type of activity are: construction, tourism, e-commerce, telecoms, financial service providers, as well as mass service providers.

According to the research conducted by TNS Polska for the BIG Report, 74 percent. representatives of companies in Poland claim that documenting the company as financially credible has an impact on their decision to start cooperation. In June 2014, 81 percent. of all respondents considered that late payment was a serious obstacle to functioning. These data can be used by all those who follow the moods in the economic and economic market thanks to the BIG Business Safety Index, which measures the level of security in business. It allows you to monitor the extent to which payment problems affect the functioning of the company.

Avoid financial troubles, check your payment credibility

Expanding knowledge about the entities we work with is mainly used to assess financial risk. Such action allows you to avoid transactions with the debtor and problems with paying invoices. Such tools are provided by Economic Information Bureaus. These are institutions that receive, store and share economic information and data. Not only do they keep Debtors Registers, but also provide information on consumer and business indebtedness previously collected from the market. However, not only BIG-i collect this type of information. The banking sector has a lot of data on debt.

- It is worth checking a potential business partner in the Economic Information Bureau. BIG InfoMonitor closely cooperates with the banking sector, thanks to which it has access to over six million information on debt. They can be found both in the BIG InfoMonitor Debtors Register as well as in the databases of the Polish Bank Association and the Credit Information Bureau - comments Mariusz Hildebrand, Vice President of the Economic Information Bureau InfoMonitor S.A.

The BIG report is the first assessment tool

The report from the BIG database can be downloaded by entrepreneurs, but also by various institutions, i.e. those who want to verify clients or contractors. They contain information on whether a given entity is entered in the BIG Debtors Register, the amount in arrears and by whom it was credited. Verifying business partners is particularly important when there is a growing fear of late payments in the market. However, such action should be a standard for all entrepreneurs. It would reduce the problem of payment gridlocks and the number of debtors.

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- By acting in accordance with the principle of "prudent always insured", business owners are often able to avoid serious financial problems, and they can use the time saved to devise new business strategies. This also applies to consumers who can check the financial credibility of, for example, developers or construction companies, etc. - says Mariusz Hildebrand.

In this way, entrepreneurs build trust towards each other, because they are aware that the effectiveness of business activity depends, among others, on from the correct selection of business partners, efficient debt collection and, to a large extent, the financial credibility of the company. The research and analyzes carried out by BIG InfoMonitor together with TNS Polska show that every year the number of entrepreneurs who check their clients in Debtor Registers is growing and more and more companies are aware that it should be done.

Checking the contractor may take place on various levels, via the Internet, consultations with other entrepreneurs, through registration documents - the National Court Register or the Central Register and Information on Economic Activity (CEIDG), also through certificates of non-arrears (ZUS, Tax Office), bank opinions and business intelligence.