[Steve Cool]

Hello all.

Today i have received quite a large order £35k ish from a new client. Usually my leads come from referals, so i'm quite happy to provide credit on the word of my trusted contacts and existing customers.
This one is in responce to an advert and none of my network know of the client.
Sooooooo, I need to credit check them (a ltd company), where do i start??

Any info greatly appreciated.


Steve

[Andy Trish]

Steve, is there a way you can look at taking a deposit as well as credit check them.

We regularly get orders for over £50,000 a time and we always get a 50% deposit, it not only helps us with cashflow but provides commitment from the customer.

credit is earned, no-one expects that amount of credit from a new supplier.

[Jeewhizz]

Originally Posted by Andy Trish

credit is earned, no-one expects that amount of credit from a new supplier.

Couldn't agree more!

[Steve Cool]

Hello.
I do usually take a deposit, when i'm dealing direct to the client or end user. But unfortunatly in commercial construction contracting, it don't work like that. It's all 30,60,90 days with staged payments and retentions.
If you ask for a deposit, you don't get the work, simple as that. It's just the way our industry works.

Steve

[Maxine]

Hiya Steve

Yes our industry is high risk so what is key here are the staged payments and the conditions relating to them. You can ask for an up front payment where there is a large outlay for materials or get them to pay a balance for materials to your suppliers directly.

If you cant get away with that then staged payments and base these around the level of risk you feel comfortable with ie £2000-£5000 and this can be specified on dates and conditions or on stages of work. Keep a separate log too of the extras and get them paid as you go along in addition to the staged payments. Also, be careful of any retention clauses where the contractor retains x% in case there are problems within a 12 month period.

If you pm me with company reg no I will do a quick credit check for you. You also need to have tight t&c's so if these are a bit vague now is def the time to tighten up.

You can also get selective credit insurance to cover a one off large contract in the event that the company goes bust so that may be something to think about.

Also, think about how it may effect your cashflow while the contract is in progress and assess risks of contract running over for whatever reasons.

Good luck and nice big contract eh?

oh, and start by looking them up on companies house

Max