New customer credit check checklist
A new customer credit check checklist for B2B product sellers: verify the company, collect trade references, set terms and a limit, and document the decision.
By the PromptLab team31 October 20265 min read
Selling on credit means lending a customer your product for 30 or 60 days. If they do not pay, you have lost the goods and the margin, and the sale was worse than no sale. A credit check before the first order is how you decide how much to lend, if anything.
This checklist is for manufacturers, distributors and wholesalers opening a new account on terms. It describes a general process, not credit or legal advice: your finance team, bank or credit insurer should set the rules that fit your risk. For the concept, read what is a credit limit, and for the terms themselves, what is net 30.
Decide whether to extend credit at all
Credit is a choice, not a default. A first order can often be paid up front while you learn more.
Before you start
Verify the company is real
Credit fraud can start with a company that does not exist, or one that borrows the name of a real one. Check this before you look at anything else.
Identity checks
Collect references and financial information
Look for evidence that the customer pays its bills. The right depth depends on the amount you are exposing.
Payment history and finances
Set the terms and the limit
Pick numbers you can explain. A limit that follows from the evidence is easier to defend than a guess.
Terms and limit
Say a customer asks for $40,000 of product a month on net 30. If their references are thin, you might open with a $10,000 limit and shorter terms, then review after three on-time payments. That keeps the first loss small.
Document the decision and set up the follow-up
A decision nobody can find later is a decision nobody follows. Record it where the sales team and finance both see it.
Record and review
The items people skip
- Calling the references. A reference that nobody phones proves nothing.
- Checking the order person's authority. A real company can still be the victim of someone pretending to be its buyer.
- The review date. Without one, a limit set in week one can stay in place for years.
- Telling the sales team. If reps do not know the limit, they quote past it.
How PromptLab helps
Keep the credit limit and payment status in your finance system. PromptLab's part is the sales side. Put the credit application and reference notes in the Files tab and as a note on the account, set a task for the review date with an owner, and keep the full history of orders, quotes, emails, WhatsApp and Telegram messages on the same account. A sales order on the account shows what has been ordered, and an invoice can be created from it. See the accounts and tasks references.
Frequently asked questions
What should a new customer credit check include?
Verify the company against the official register, confirm the person ordering is authorised, collect trade references and call them, and review a credit report or filed accounts if the amount justifies it. Then set terms and a limit, and record the decision.
How do I set a credit limit for a new customer?
Base it on the evidence, not the order size. Start low for a new account with thin references, state it in writing and review after a few on-time payments. Your finance team or credit insurer can help set the formula.
Should a new customer pay upfront?
Often the first order is a reasonable time to ask for payment in advance, a deposit or a smaller order on terms. It protects you while you learn how they pay. Once there is a record, you can move to normal terms.
How long should a credit check take?
For a small account, a verification of the company and a couple of reference calls can be done in a day or two. A large limit or a risky market justifies more time and a credit report. Do not rush it because the buyer is in a hurry.
Who should approve a credit decision?
Someone outside the sale if possible, such as finance or a credit controller. Reps want the order, so a second person should approve any decision above a set amount.