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Using a professional credit checking company could be seen as
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sound business sense— but according to Jeremy Unwin, the co-founder of OnStop, this process needs to be supplemented.
Unwin's web-based firm relies on its membership— largely SMEs in various industry sectors—to provide information on customers who fail to pay their bills. Its system enables businesses to see which companies are bad at paying and register their own poor payers. Haulage companies take note: Unwin believes that this industry is one of the worst sectors for good credit control.
OnStop sends letters to late-paying customers, warning there will be a permanent record of their business being placed 'on stop unless they settle the debt within 10 days.
Unwin claims OnStop offers a more accurate picture of creditworthiness because some credit checkers rely on data from utility companies, even though utility blils are normally the f irst bill pad by any business regardless of its financial position. "The last thing you want to happen is for the power to go off," he explains. Experian and Equifax say they do not rely on utility bills to prepare reports for their clients.
Unwin also says information gathered from Companies House can often be very old, You can finish trading in 2005 then file a report 18 months later," he says. "And a lot can happen in that time. With us, company data is being gathered all the time. If there was a problem with a company a week ago and we have a member dealing with that company, the information is up to date, to the second."
He describes OnStop as a conduit for communication and says it acts in a nonaggressive manner. "OnStop is primarily about getting two groups to talk. All a letter does is prompt the supplier to make contact. Once they have paid, we take them off stop and there's no historical record. If they fail after 10 days it does become historical."
Unwi n emphasises the need for OnStop to be used in conjunction with a credit checking company, in order to keep up to date with your customers trading activities. 'It boils down to the fact that every company goes bust for one reason, they have run out of money -and once they do, they don't trade any more. If they don't respond tea letter then something is seriously wrong.
"Experian would offer you the complete tool kit, but you always need to supplement it with other information to get a complete picture," OnStop charges an annual subscription fee of £25. For each letter sent it charges an additional £4.95.