Credit References

Why do companies not comply with credit requests?


  • Total voters
    13

AccountsReceivable@DRC

Moderator
Staff member
20
Morning Everyone,

Within the past few months - I have come across a few companies that simply refuse to comply with credit reference requests. For one reason or another - they will not fill them out and send back.

As a result - I have compiled a list of those who refuse - so I can politely refuse their request - when it comes across my desk. I've already caught a few - what goes around comes around....

Reference requests are refused - for a number of reasons. But I am of the belief that when a company doesn't comply - it is usually due to the fact they will be reporting negative credit information against the company requesting credit. They are worried the "requesting company" will advise their customer (who they may/may not be dealing with) of the negative remarks. I had this occur this week - a reference called and advised they were receiving partial payments and the account was extremely slow. She did not want to document this on my form - so it was a verbal conversation. She asked numerous times to keep the discussion confidential - as she wanted to make sure their receivable was not in jeopardy.

We all know credit references are confidential - and all information noted is to remain that way. I always advise the new customer of a reference they provided who will not comply. And I ask them to replace with one that will. There are other factors involved - beside references - when determining whether a new account has the credit worthiness to be allowed terms. One can't rely solely on references noted on an application. But at the same time - the days of providing references guaranteed to "sing your praises" are diminishing. Simply as a result of tough economic times - especially in the trucking industry.

I wanted to poll forum members on this topic. And see what your opinions were regarding the reasons why a credit reference request is non compliant.
 

noproblembuddy

Site Supporter
2
Morning Everyone,

Within the past few months - I have come across a few companies that simply refuse to comply with credit reference requests. For one reason or another - they will not fill them out and send back.

As a result - I have compiled a list of those who refuse - so I can politely refuse their request - when it comes across my desk. I've already caught a few - what goes around comes around....

Reference requests are refused - for a number of reasons. But I am of the belief that when a company doesn't comply - it is usually due to the fact they will be reporting negative credit information against the company requesting credit. They are worried the "requesting company" will advise their customer (who they may/may not be dealing with) of the negative remarks. I had this occur this week - a reference called and advised they were receiving partial payments and the account was extremely slow. She did not want to document this on my form - so it was a verbal conversation. She asked numerous times to keep the discussion confidential - as she wanted to make sure their receivable was not in jeopardy.

We all know credit references are confidential - and all information noted is to remain that way. I always advise the new customer of a reference they provided who will not comply. And I ask them to replace with one that will. There are other factors involved - beside references - when determining whether a new account has the credit worthiness to be allowed terms. One can't rely solely on references noted on an application. But at the same time - the days of providing references guaranteed to "sing your praises" are diminishing. Simply as a result of tough economic times - especially in the trucking industry.

I wanted to poll forum members on this topic. And see what your opinions were regarding the reasons why a credit reference request is non compliant.

I find that when companies do not send back an app or if their references are not complete (whether it's a lack of transparancy or iffy references), they are generally declined. I know that some American companies will not provide references and many Canadian companies will insist that you fax them something, but are not good at returning them. I've had to hound those people usually and if there is a load pending, I get the company who listed the references to give me more names and mention their listed references are holding up the order. That usually results in some action.
 

theman

Well-Known Member
20
From the standpoint of asking a carrier/broker you are taking loads from, I think I agree with noproblembuddy.

With customers outside the carrier/3PL community, I've always found it hard to get those. In many cases, we have a hard time getting a credit app because most companies aren't turning suppliers or adding them so quickly. With an RFP, a lot will send it as an automatic though.

Customers at many times balk when asked for industry trade references, I'm guessing because they don't necessarily want to give away who the competition is ... or they're afraid off pissing off the incumbents ... hard to say.

We count more on D&B reports or if the company is public we just check out their financials through their website. I find customers generally are paying based on the terms they tell us ... just in so many cases those terms are longer than we'd like.
 

AccountsReceivable@DRC

Moderator
Staff member
20
These points of view are interesting - thanks for taking the time to post on this topic.

Please further add your poll opinion by casting a vote.

Thank you
 

DIETCOKE

Site Supporter
20
We are happy to comply as a reference for our regular repeat customers. I am always surprised to be listed as a reference for customers that are no longer active or only for extremely small & sporadic shipments.
On the other hand, I am only asked about half of the time for trade references when I broker freight...
 
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