Credit Reports Credit Risk CreditorWatch
4 mins read

How manufacturers can use credit reports to avoid risk

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Manufacturers are faced with challenges daily; from maximising automation to keeping on top of supply and demand. The need for an instant credit report has never been more critical for manufacturers.

The pandemic saw a decrease in the manufacture of some goods and a rise in others. In 2022, manufacturing is one of the top 10 fastest growing industries globally. Playing a significant part in any economy, manufacturers are those who make to order, make to stock and make to assemble.

Extending credit is a large part of running a manufacturing company. Ensuring your creditors can make good on what they owe is crucial to maintaining cash flow and safeguarding your business.

In this blog, we will discuss how manufacturers can make better business decisions with CreditorWatch’s Business Credit Reports and ongoing monitoring.

Using a credit report to avoid high risk businesses 

It is imperative for manufacturers to ensure that the businesses they are trading with can pay for the products they order. When customers fail to pay on time, manufacturers run into cash flow problems that can impact their ability to meet their own financial commitments and ultimately jeopardise their business. Manufacturers typically supply to customers on credit, with the promise the amount will be repaid once the products have been sold.

There are multiple reasons why customers fail to pay manufacturers; from day-to-day cash flow problems of their own to an unexpected drop in sales. These businesses may have a poor payment history or previous debt collection records that are not visible to the public.

Every manufacturer’s nightmare is spending money on production only to find out that the business they have supplied cannot pay their invoices. If you’re creating goods or products for someone, gathering a clear picture of the risk you could be exposed to is essential.

Make better business decisions with CreditorWatch’s credit reports 

Performing your due diligence as a manufacturer to check the credit score of the business you are extending credit to helps ensure reliable and stable cash flow. Credit reports provide insights into the credit history and financial health of potential business partners. Neglecting to investigate the credit history of even one retailer you are supplying credit to can have disastrous consequences for your business.

Using vast amounts of data from diverse sources, CreditorWatch can assess new and existing customers, allowing you to trade with assurance. CreditorWatch’s extensive and exclusive data provides you with the insight you need to make the best business decisions possible, reducing the risk of payment defaults and bad debt.

Through a comprehensive Business Credit Report from CreditorWatch, your manufacturing company can discover if the customers you are dealing with have any high risk indicators. These include payment defaults, court actions, debt collection records and administration appointments. This is indicative of whether the retailer has failed to repay any previous manufacturer and may be of high risk to you.

A business credit report check also showcases the business’s lifespan, the company status, information on the director, the company address and shareholder details. These are important to view for a manufacturer as you can see which shareholders back the retailers, making for a strong indication on whether they are worthy of extending credit to.

Cross directorships and phoenix activity identifies directors with other previously failed or failing companies. Sometimes directors will start a new company after a previous one has failed. They restart with a new name and branding in the hopes of tricking others into thinking it isn’t owned by a previously failed or bankrupt director. Choosing financially stable businesses to work with reduces your credit risk. Our credit reports ensure you have all the information you need to make these important decisions.

Monitoring and alerts 

Just because a credit report check on a business has come up clean as a whistle does not mean it will stay that way. With CreditorWatch’s Monitoring and Alerts, you can stay on top of any changes to a business’s financial health.

Whether you have extended credit to a plethora of businesses or just one, any time a change occurs to their credit, you will receive a notification. You can then decide whether you continue to do business with them.

Through real time email alerts and notifications, you will know if a debtor goes into administration, has stopped paying other suppliers or has been taken to court. This invaluable information gives you greater control over your debtors and deeper insight into how they are trading on an ongoing basis.

Invaluable results 

Extending credit always comes with a risk. With CreditorWatch’s unmatched business credit scores and advanced credit management tools, you can limit the risk to your manufacturing business. Contact us today and start making better and more informed decisions about who to trade with.

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Michael Pollack
Head of Content & Communications
Michael joined CreditorWatch as Head of Content and Communications in July 2021. He has more than 20 years’ experience in business journalism, marketing and communications strategy and digital content development. He is passionate about communicating to the business community how CreditorWatch’s product suite can help them grow and protect their companies.
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