• Enquiry
  • Quote
  • Agree
  • Work
  • Invoice
  • Paid

Checking Who You Are Dealing With

This is not legal or credit advice. It describes checks that are freely available in most jurisdictions and what each one indicates.

For a software-side reference alongside this discussion of pre-work decisions, contracts, and small-business administration, Monitask has this resource.

Of everything on this site, checking a new customer has the best ratio of effort to outcome. Ten minutes, and it separates the routine job from the one you will spend six months on.

The four checks

One. Is it a company or a person?

These are different debts with different routes. A limited company can be dissolved with the debt inside it. An individual cannot. The trading name on the van tells you nothing — plenty of sole traders trade under a name that sounds corporate and plenty of companies trade under something that sounds personal.

Ask for the full registered name. A customer who is reluctant to give it has told you something.

Two. Does the entity exist and how long has it existed?

In the UK, Companies House is free and takes two minutes. Incorporation date, registered address, directors, filing history, and whether anything is overdue. (Public register — the primary source.)

In the US, the equivalent is the state's business entity search, which varies in quality by state and generally shows formation date and status.

A company incorporated three weeks ago is not automatically a problem — new businesses are legitimate. It is a reason to take a larger deposit rather than a reason to decline.

Three. What does the filing history show?

Overdue accounts, a recent change of directors, a registered address that is a mail-forwarding service, or a string of previous companies at the same address with similar names.

None of these is conclusive and the last one is the one to notice. A sequence of short-lived companies with related names is a pattern, and it is visible for free.

Four. Has anybody else been paid?

Ask for a reference from another supplier, on jobs above whatever threshold makes it worth the awkwardness. Most customers give one without difficulty, and the ones who cannot have answered the question.

What to do with what you find

Nothing you find should automatically end the conversation.

The output is not yes or no. It is how much money you are prepared to have outstanding at any point, and that number changes what you ask for.

Clean record, established entity: normal terms, normal deposit.

New entity, or thin history: larger deposit, shorter stages, smaller balance at the end.

Pattern of dissolved companies, or a reference nobody will give: payment before or on delivery, or decline.

The check nobody does

Confirming the name on the invoice matches the entity you agreed with.

An invoice addressed to "Dave" when the agreement was with a limited company is not a debt of that company. An invoice to a company when the customer was acting personally is equally wrong.

This is a five-second check at invoicing and it is the commonest technical defect in small-firm invoices, and it converts a debt into a query at the worst possible moment.

Consumers are a different question

Credit checks on individuals are constrained by law in most jurisdictions and generally require consent and a lawful basis. This is not something to do casually.

For consumer work the practical equivalents are: a deposit, staged payments, and not starting work at an address you have not visited.

And an address that matches the name. For domestic work the property is a fixed reference and a mismatch between who is instructing and who lives there is worth a question — landlords, agents and family members instructing on behalf of somebody else are all common and all change who owes you.

What the checks cost

Nothing, in most jurisdictions, for the company checks.

Companies House in the UK is free. State entity searches in the US are free or nearly so. Paid credit reports exist and are worth it above a threshold that depends on your job sizes — for a business whose typical job is a few hundred, they are not.

The reference call costs a phone call, and the awkwardness of asking is smaller than the awkwardness of the alternative.

The one real cost is time, and it is ten minutes against the several days a bad debt consumes. Nothing else on this site has that ratio.

Doing it once per customer, not once per job

A repeat customer does not need rechecking every time.

What changes is worth a look: a new company name on the paperwork, a change of contact, a move to a different address, or a job substantially larger than previous ones.

Any of those is a reason to look again, because each of them can mean the entity you are dealing with is not the one you dealt with before — and that is exactly the situation where an invoice ends up addressed to somebody who does not owe it.

The awkwardness

Asking for a registered company name is not an accusation and does not read as one when it is part of your ordinary process.

"I'll need the full registered name for the invoice" is a sentence about paperwork, and it obtains the information without any suggestion that you have doubts.

The version that reads badly is asking late, when the tone has changed and the question arrives because something has gone wrong. Doing it at the quoting stage is what makes it routine.

The short version

  • Ten minutes on a new customer has the best ratio of effort to outcome of anything on this site
  • Four checks: company or person, whether the entity exists and for how long, the filing history, and whether another supplier has been paid
  • A sequence of short-lived companies with related names at one address is the pattern worth noticing, and it is visible for free
  • The output is not yes or no but how much you are willing to have outstanding, which changes the deposit and the stages
  • Confirm the invoice name matches the entity agreed with — the commonest technical defect in small-firm invoices
  • Consumer credit checks are legally constrained; for domestic work use deposits, stages and an address that matches the name

For broader background on pre-work decisions, contracts, and small-business administration, see IRS business resources.