www.bifa.org


Policy & Compliance Some credit application tips


How to go about ensuring you know who you are doing business with


Our friends at EFTA (The European Freight Trades Association www.eftaweb.com) have published a credit application checklist. Some of the tips are below but space does not allow full publication or inclusion of the rationale behind the tips and their use. EFTA members receive unique and vital up-to-date information that is missing from all other credit reporting options. The checklist includes:


• Make sure you have the 8-digit company registration number – a company can change its name as many times as it wants but it cannot change its registration number.


• Check the email domain address that has been used and then compare it to the one on the website (if there is one).


• Get a landline telephone number from the applicant company and then ‘Google’ it.


• Consider having a look at the address of the applicant company on Google Maps.


• Credit check the company with whatever credit reference agency you use. Obtain a copy of the last filed accounts to see


if there is any useful information about the company (such as a profit and loss account, balance sheet, details on director’s remuneration, dividends that have been paid and related party transactions). Accounts can be obtained for free, and very easily, from Companies House Beta. https://find-and-update.company- information.service.gov.uk/


Additionally:


• Always ask for two trade references and make sure they are followed up.


• Have a look at the accounts (if there are any) filed by the companies nominated as trade references to see whether they look genuine.


• If your credit reference agency facility has the function, see how many searches there have been (possible applications for credit) in recent months. If there have been a large number of searches this may be an indication of short firm fraud being committed/planned.


• If it is possible, arrange to visit the trading address of the applicant company to see whether the applicant company actually exists.


Membership of EFTA costs £120 to the 31 March 2022 (allowing for the 25% BIFA Membership discount).


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