Extending credit to customers and business partners can be a great way to attract new business and establish trust but can also be highly risky without performing proper business credit checks beforehand.
Given that dealing with bad-debt write-offs, late payments, and invoice disputes are time-consuming and expensive, most businesses rely on credit profiles to provide the information they need to decide whether or not to grant credit.
Monitoring the credit activity of customers, partners and suppliers can also alert you to other potential risks that can impact your business. For example, having advance knowledge that a partner is in financial distress or an important supplier is about to go bankrupt enables you to pursue remedies to protect yourself, such as engaging other partners or pursuing alternate suppliers.