New Customer Credit Check Checklist for UK Limited Companies

Identity and registration checks

Before any credit is extended, confirm the customer entity actually exists and is actively registered. Search Companies House to verify the company number, registered name, registered address, incorporation date, and current status. Check that the company is not subject to a winding-up order, administration, or county court judgments, all of which are publicly available. Confirm the directors named in the customer's communications match the current officer list on Companies House.

• Confirm company is not dissolved, struck off or in liquidation
• Note the SIC code — does it match the customer's stated business?
• Check filing history for late or missing accounts (a red flag)
• Identify the registered address — does it differ from the trading address?

Financial health review

Obtain the customer's most recent filed accounts from Companies House. For micro and small companies these may be abbreviated, but even a simplified balance sheet shows net assets, any accumulated losses, and the trend between years. For larger customers, review the full accounts including the profit and loss account, cash-flow statement, and any going concern disclosures in the auditor's or accountant's report.

Run a commercial credit report through a bureau such as Creditsafe, Experian Business, or Dun and Bradstreet. These aggregate county court judgments, payment data from other suppliers, and a derived credit score into a single report. Commission this before setting the credit limit, not after a problem arises.

Trade references and payment history

Request two trade references from suppliers who have extended credit to the customer. Ask specifically: what credit limit was set, have invoices been paid to terms, and are there any current overdue balances? A customer who consistently pays at sixty days on thirty-day terms is telling you something useful regardless of their credit score.

Cross-reference any reference provided with the customer's actual supplier list where possible — customers sometimes provide references from connected parties or from suppliers they treat well precisely because they know a reference will be sought.

Setting and documenting the credit limit

Based on the information gathered, set an initial credit limit and document the rationale. The limit should reflect both the customer's assessed capacity to pay and the maximum exposure your business can absorb if that customer fails. A new customer with thin history should start on a lower limit and have it reviewed after three to six months of on-time payment.

For customers where the risk is material but the commercial opportunity is strong, consider requesting a personal guarantee from the directors of the customer company, or requiring proforma payment for initial orders. Document whatever terms are agreed in your customer account opening form, and ensure the customer has signed acceptance of your terms and conditions before goods or services are supplied on credit.