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24 March 2024
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Business Credit Reports: A guide to get the best pricing for business credit reports

You will learn why business credit reports are a key part of analyzing new and existing customers to ensure they are creditworthy and to give an appropriate credit limit. 

I will show you how to evaluate your needs to select the appropriate credit report for your risk you are taking. 

Quick Summary

In case you are in a rush, here is an overview of how to get the best pricing for business credit reports: 

  • Know how many new customers you get each month or year
  • Calculate how many active recurring clients you have
  • Place them into 3 categories: Small, Medium and Large customers
  • Learn the report that is best for small, medium and large receivables
  • Ensure your customer agreement is up to date so you can add on things like legal fees in case of a problem and have a personal guarantee
  • Be careful with companies less than 5 years old or have a high risk of failure
  • Minimize the risk of a client not paying you in full and on time by maximizing the calls for accounts more than 30 days past due
  • Have a collection agency or lawyer screened and ready to help when needed

If you are looking for more protection for your accounts receivables, be sure to watch a Free training to get a visual of how you can incorporate a few simple strategies for maximum protection with the clients that you are working with. 

How to get the best price for business credit reports?

1.Calculate how many new customers you get per month or year

The Best way to manage accounts receivables when giving your client credit terms is to first identify how many new clients you will be bringing on over the next month or year. 

But, why? 

If you know how many new clients you have to evaluate in the future, you can then plan out a budget and then incorporate this into your admin fees. 

This also means you will want to share with your sales team the onboarding procedure required to bring on a new client. 

So, the sales team can push back a bit if it takes too long to approve a client. That is why getting their buy in and agreeing on the procedure. 

In other words, knowing how many new clients you are expected to get, will give you an idea of the budget you need to add into your administration fees, the time it will take to onboard a client and have the sales team help you through the procedure. 

If you want to learn more about the exact credit management process that I teach my clients and use with my own business, you can watch my free masterclass here.

2. Divide the number of new customers into 3 categories. High receivable, medium receivable and low receivable amount. 

Why do we need to separate the clients into 3 categories being small, medium and large customers? 

How does a large client affect you if they don’t pay VS a small client? 

In other words, what does your business look like if your largest client cannot pay you this month? 

The evaluation process of a large customer is nothing like the evaluation of a small customer. 

When we evaluate a small customer, we don’t want to invest too much money or time. The risk is minimal. The downside is minor. 

What I mean is, if we spend too much time and money, we might even bring in the client in at a loss. 

When we evaluate a medium size client, we have a report that meets the risk head on.

With a large client, we maximize the protection and minimize the chance of them not paying you. 

I explain this best and in much more detail in my training video where my clients get to know more about me and our process. 

3. Add up how many active recurring clients you have

Take the time to review all of your active and recurring clients. I suggest using clients that order more than once a year that you give credit to. 

When a customer goes bankrupt, it is usually your long-time client and it was a surprise. I talk about this in detail in How to avoid not getting paid by your largest client 

Most of my customers have a process for their new clients to evaluate the risk. Then, they simply forgot to do it again. 

More often than I’d like to, I get calls of frustration from my customers about a client that they are having problems with. 

Only to realize that they have not evaluated their financial situation in years. 

We don’t want to bother our amazing clients with signing new credit applications and giving us permission. We more often than not don’t need anything from them. 

Once we know how many clients we put a simple yet extremely efficient process in place to protect you. 

4. Divide the number of active recurring clients into 3 categories. High, medium and low receivable amount. 

Now that we have clearly identified our active clients we can now categorize them into appropriate risk levels being small, medium and large. Just like we did for the new clients. You can learn more by clicking here how we do this and we explain this entire process in detail. 

Most of our clients have the 80/20 rule. 80% of their revenue coming from 20% of their clients. 

It is critical to identify the large clients from the bunch as they can hurt you the most if they go bankrupt. If you are more of a video person you can watch here.

5. Combine both new and active recurring clients to have the total number for each category. 

The video shows exactly how we do this. Taking both expected new and existing clients now and combining them is the information we need to proceed. Once we have the master total we can plan out what is the best report for each of the 3 risk levels. 

Some things to think about below or you can jump to the video and watch here

-Once we have these totals we can plan out what is your best strategy and budget

-Without categorizing each client into the appropriate risk levels you are leaving yourself wide open if a problem happens on a major account

-The downside is many companies skip this step because they haven’t been through a recession in the past and lived through a major client bankruptcy. 

In Conclusion 

There you have it. The 5 best ways to get the best price for your business credit reports. 

Once you have the volumes by category identified, we can get the price for your reports. 

During this training video I explain in detail how to avoid your largest client not paying you. Once we have your clients identified, I can suggest the best reports for your small, medium and large clients. 

Most of my clients get free reports for their smaller clients that are included in their plan. Basically a pass or fail. They get this answer in minutes. 

If the small client does not qualify for credit, they have to prepay.  

The medium size clients, we also provide you ideas about the best valued reports based on your volumes required. Often, these reports are provided within minutes as well. Clients love to be able to make decisions so efficiently and confidently. These reports cost between $25 and $99 dollars. 

The large clients, the ones that can shut you down if they don’t pay, this is more strategic. Once we know the volumes, we can provide you with 2 or 3 amazing strategies to minimize your risk. These reports take a couple of hours up to a couple of days. These reports cost between $50 and $500 dollars. 

Prices vary due to annual volumes and risk level due to the industry you sell to. Everything can be explained in more detail here

FAQs

What credit report is used for business? 

Equifax, Experian and Dun & Bradstreet are the 3 large credit bureau databases. However, these are computer generated reports. Many clients prefer a senior credit manager to review the data, their industry and the current economic circumstances. Credit insurance companies can also provide our clients with decisions now. Meaning that they will determine if their new or existing customer is strong enough to have their receivable insured. 

How do I get a company’s credit report?

You can sign a contract directly with one of the 3 credit bureaus mentioned above. Or, you can get better pricing being part of a group like ours where all clients share price volume discounts. 

What is a good credit score for a business report?

Most commercial credit reports have a score system like 1 to 100 for each company. The closer to 100 the better. Just like in school.

Benjamin Scott

Benjamin Scott  is the CEO of Access Credit. For over 10 years, Benjamin has been helping business owners manage their risk and coaching his clients who have accounts receivable. Benjamin specializes in helping businesses get the high-quality reports they need, at the best price that best protects them. Learn more here

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