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Not All Suppliers Report A Company’s Positive Payment History

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Not All Suppliers Report A Company’s Positive Payment History

By Marco Carbajo, Guest Blogger
Published: April 12, 2013

Getting approved for a line of credit with a supplier is simply an opportunity for you to start building your company’s creditworthiness.  The key to establishing positive credit is to make regular purchases using your vendor credit lines, and then paying invoices on or ahead of the due date.

If you do not make regular purchases, then there is no way for you to establish any kind of payment history. So it is vitally important that you carefully select the suppliers with whom you apply for credit. Make sure that your business can use the products and services it offers to develop and grow your company.

This will allow your company to purchase the supplies it needs to operate without having to pay any money up front, enabling you to conserve cash while deferring payments for 30 or 60 days depending on terms.

It’s important to note that a supplier will only report an account once it begins issuing invoices to a company. Your account will show up on your company credit file based on several factors including invoice due date, reporting cycle and day of the month.

There are two key factors to remember:

  1. Not all suppliers report to a business credit reporting agency.
  2. Not every supplier reports on the same day, week, or month for that matter.

Now the good news is you have the ability to add positive trade references to one business credit agency, Dun and Bradstreet—but it does come at a cost. However, the first step is to apply for a DUNS number.

For the suppliers that do report, it’s important to note that each supplier has its own specific day to batch and submit payment data to a business credit reporting agency.

In addition, once payment data is submitted to a credit agency, then there is a short delay before it actually populates on a company’s credit report. So don’t expect to see a first payment showing up on a business credit report one or two days after paying an invoice.

For example, let’s say a company has a $5k line of vendor credit with a supplier that sells electronics with net 30 day terms. The company decides to purchase $1,500 in computer equipment using a credit line on January 11.

The company receives an invoice for $1,500 with a due date of February 10 (net 30 days). The company submits its payment to the supplier and it processes the payment on February 9. The supplier records the transaction, but its reporting date is on the 1st of every month. Since the invoice was paid after the 1st of February, the payment transaction will not be sent to the credit agency until March 1st, which is the next reporting date for that supplier.

So don’t get discouraged if you do not see a positive payment showing up on your company credit report right away. You can always inquire with the supplier, but it is always best to give it some time.

Another thing to remember is to which business credit agency the supplier subscribes. Not all suppliers report to all three agencies. Some suppliers report solely to Dun and Bradstreet, while others may report to Corporate Experian and Small Business Equifax.

About the Author:

Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

Comments:

It’s important to note that a supplier will only report an account once it begins issuing invoices to a company. Your account will show up on your company credit file based on several factors including invoice due date, reporting cycle and day of the month.
Marco, these are some good thoughts on business credit. I'd add that many, if not most, of smaller companies are not reporting to business credit agencies. One thing for small businesses to also keep in mind is that there are many different business credit agencies, each with their own focus. Some focus on specific industries (transportation, construction, etc), some focus on businesses of certain sizes, some focus on specific geographies. It's really important that if you are paying your bills on time that you request that your vendor report that to the different agencies.

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