Annual accounts are only a fraction of the reality. They tell us something about a company's past but are often outdated by the time they become available. Moreover, many companies – such as sole traders or companies with a specific legal form – do not publish annual accounts at all. In addition, annual accounts are often tax-inspired and can therefore paint a distorted picture. Company information goes far beyond annual accounts: current payment experiences, sector comparisons, ownership structures, risk indicators and numerous other data sources complete the puzzle and provide a much more complete picture.
A personal relationship or years of working together creates trust but offers no guarantees. In an economy that is becoming increasingly international and digital, companies work with a broad portfolio of customers and suppliers. A customer who seemed reliable yesterday may find themselves in financial trouble today. Objective data acts as a necessary counterbalance to gut feelings and personal impressions. It enables entrepreneurs to identify risks in good time and base decisions on facts rather than false certainties.
The price of business information must always be weighed against the potential risk you run. A bankrupt customer, an unreliable supplier or an invisible debt position can result in thousands of pounds in losses and even jeopardise the continuity of a business. The cost of a credit report, including monitoring, is insignificant in comparison. Business information is not a cost, but an investment that protects companies from unexpected damage and enables them to do business and grow with confidence.
Large companies often have their own risk departments and extensive data teams. However, it is precisely the smaller companies that are most vulnerable to customer default or bankruptcy. A single unpaid invoice can put pressure on the cash flow of an SME or a self-employed person. Business information is scalable and can be perfectly tailored to the needs of small businesses. This gives them insight into risks and opportunities without it being unaffordable.
Being selective with risk analysis seems efficient, but it can be dangerous. That one customer who looks reliable may have hidden problems. Screening the entire customer portfolio does not have to be expensive or time-consuming. It provides a clear overview of healthy, less healthy and risky relationships. This allows a company to better focus its commercial efforts and avoid unpleasant surprises.
Sole traders do not publish annual accounts, but that does not mean that no data is available. There are numerous other sources that can be used to form a reliable picture of a sole proprietorship. By collecting payment experiences from suppliers, analysing relationships with other companies and linking signals from the market, you can still get an impression on which to base your decision. With hundreds of thousands of sole proprietorships operating in Belgium and abroad, it would be wrong to minimise this. After all, companies that work exclusively with this segment run a considerable risk if they do not use additional information.
No predictive model is infallible. Algorithms, scores and indicators work with probabilities and margins of error. This means that there will always be false positive and false negative results. It is therefore important to be transparent and keep margins of error to a minimum. Indicators and scores are tools that should never be regarded as the only absolute truth. The strength lies in combining objective, external data with internal insights and experiences. This creates a balanced basis for decisions.
Business information is much more than the figures in an annual report. It is a combination of current data from numerous data sources, international insights, payment experiences and algorithms that reveal risks and opportunities. Entrepreneurs who continue to cling to misconceptions run the risk of making wrong decisions and exposing their business to unnecessary risks. By putting facts above myths, the risk of damage is reduced and there is room for growth, stability and strategic success.
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