A quick check on new customers

In most businesses, you’ll have to sell on credit to increase sales. Larger businesses normally have plenty of resources to check out new customers before granting any credit. For example, they might use credit rating agencies or even have credit insurance in the event of non-payment. But, for a small or growing business such things can be a bit more awkward, time-consuming and costly. So here are a few ideas which any business can do quickly and free of charge on the web. These are not fool proof, but at least verify that the most basic information given by prospective customers is correct. So if you smell a rat, try these out. It’s better than loosing money.

Ask for and verify the VAT number of the customer. This can be done for any European VAT registered person or company at this website http://ec.europa.eu/taxation_customs/vies/ . Just fill in the details and you get the address back to you. This can be quickly checked against the address provided.
If the business is a company, go to the website of the company registration authority or local chamber of commerce to verify the company name. Most such websites e.g. the UK Companies House (http://www.companieshouse.gov.uk/) or the Irish Companies Registration Office (www.cro.ie) allow you to search by company name and number and view basic data free.
Taking the previous point a step further, you can usually buy a copy of the most recent accounts of any company from the relevant authority. These can give you great information at a relatively low cost (£1 per set of accounts in the UK or €2.50 in Ireland.
Don’t forget about social sites like Facebook and Twitter. It’s amazing how many business set up pages. While you’re unlikely to get detailed information on finances, a thriving and active site with lots of followers and fans might tell you something.

Of course, as your business grows you may be able to delegate some of this or pay for a more sophisticated service. Meanwhile, take care and try to get the right balance between increasing sales and granting credit to the wrong people.