Finance and sales teams
Checks before giving a customer credit
Credit means trusting a customer to pay later. A quick check on the entity before you agree terms lowers the chance of writing off the debt.
Updated 2026-06
The risk
Extending credit to the wrong customer ties up cash and can turn a sale into a loss. The risk is highest with new customers you have no history with.
Key facts
- Confirm the legal entity named on the credit application.
- Check the current status before agreeing terms.
- Start with a limit you could absorb if it went unpaid.
- Review the limit as the customer proves reliable.
Set terms to match the risk
You do not have to refuse new customers. You can start smaller, ask for part payment up front, or shorten terms, then extend more trust as they earn it.
Watch for change
Monitoring the customer means a change in their standing reaches you, which is exactly when you would want to tighten terms rather than ship more on credit.
Check a company before you commit
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