When it comes to making business credit decisions, it’s hard to know which information to trust. The data and analytics you rely on to manage risk and set appropriate credit terms has serious implications for your company’s financial health. But unlike consumer credit, there’s no one single “credit score” in business credit. Consulting a business credit report is an important first step in evaluating potential business partners and vendors. At Advanced Fixtures we have the experience to help qualify suppliers and their products to the end user. The ability to find and keep an exceptional and reliable supplier team has always been fundamental to the success of our business.
When vetting vendors, it’s important to ask the right questions. The following questions are what help us to determine a good fit to serve you and your company’s needs:
What’s Their Financial Health?
What is their financial stress?Are they likely to go out of business? Will the vendor be around in nine years? If not, can you live without them? Take advantage of evaluations by neutral third-party analysts. What are the analysts saying about the vendor’s prospects in the market? Is the vendor in solid financial shape? What does their sales pipeline look like? Does the vendor’s executive leadership team have a track record for jumping from one company to another, or do they have a track record of longevity and success?
How Long Have They Been in Business?
When choosing a vendor, you need to look at the longevity and sustainability of the business. How long has the vendor been in business doing this type of work? What is their depth of experience? What is their skill set, and how do they portray their best practices to you? You want to partner with a company that continues to invest in its business. A report allows continuous monitoring for 12 months, meaning you get up-to-date information each time you access a company’s credit file.
With Advanced Fixtures, we provide this report to be proactive in helping you understand the shift from credit to credibility. It’s not just about quantitative scores, it’s about the qualitative conclusions we draw in evaluating if a vendor is right for your business or project.
What’s Their Working Capital?
Working capital is the money businesses have at hand to cover day-to-day expenses. It’s an important indicator of the business’ financial health, as it acts as a cushion and offers opportunities for growth. Working capital is an important financial metric to understand because not only does it fluctuate, but it can also give you borrowing power. Lenders and other creditors will look at it as a measure of a company’s overall health and a business’s ability to take on new debt. Though, even successful businesses struggle with maintaining enough working capital, especially businesses with seasonal fluctuations and companies with a large volume of outstanding accounts receivable. It is also imperative to see what the vendor’s credit capacity is, to understand how much credit they are actually able to handle.
By analyzing your vendor’s financials regularly, including the balance sheet and profit and loss statement, Advanced Fixtures can help you plan to meet potential shortfalls.
Have any Liens, Suits, or Judgements Been Filed Against Them?
Understanding legal activity is crucial in identifying risk. Legal Events cover past and present legal activities that could impact a company’s financial stability and operations.Examples of legal activities that could affect your business include bankruptcies, lawsuits, liens, judgements, Uniform Commercial Code (UCC)filings, and Personal Privacy Security Act (PPSA) statements. D&B collects business-related bankruptcy information from all 276 bankruptcy courts in theUS, and each bankruptcy is investigated and confirmed by an analyst before being posted to a business credit report. Also, D&B is one of the few providers to feature lawsuits in its business credit reports. Lawsuits may signal an impact to a business’ credibility, liens may indicate difficulty to pay, and judgments may mean it has large outstanding financial obligations.
Advanced Fixtures’ vendor evaluation and selection process can be a critical part of product and process improvement, whether you are searching for sources or providing services and materials.
By utilizing a Dun & Bradstreet report, we give you the power of information. Contact us today to get started.