How to credit-assess a new customer
Ten minutes before the first invoice is cheaper than a collection case six months later.
You know who you are giving credit to — and how much you are willing to give — before the invoice goes out.
Step by step
- 01
Look the company up before you say yes
Start with the CVR number (the Danish company registration number). What company form is it, how long has it existed, who is authorised to bind it, and have accounts been filed? A company with no filing history and a new managing director every six months is not a customer, it is a risk.
- 02
Look at the company form — it decides who is liable
In an ApS or A/S (a Danish private or public limited company) the owner is, as a rule, not personally liable. In a sole proprietorship the proprietor is. It is the same invoice, but two entirely different cases on the day it goes unpaid.
This is where it goes wrongIf you sell to a newly formed ApS with no capital and no track record, you are in reality selling on trust alone. Then the amount should reflect that — or the security should be in place.
- 03
Set a credit limit, and write it down
A credit limit that exists only in the salesperson's head does not exist. Set an amount per customer, put it into the system, and let that be what decides whether the next order goes through.
- 04
Ask for security once the amount is large enough
Payment in advance, part payment, a guarantee or retention of title. It is not distrust — it is professional conduct, and serious customers are used to being asked.
- 05
Monitor the customer after you have said yes
A credit assessment is a snapshot. The customer's circumstances change, and so does the risk. Set up monitoring, so that you are told when something shifts — not only once the invoice has fallen due.
This is where it most often goes wrong
Not because anyone is careless, but because the mistakes are easy to make and only surface once it is too late.
The salesperson makes the decision
Whoever earns a bonus on revenue is not the right person to set the credit limit. The decision belongs in finance, not in sales — and it has to be one that can be answered with a no.
You credit-assess only once
The customer you approved three years ago is not necessarily the same business today. Ongoing monitoring catches what an old assessment does not.
You give credit because the customer is large
Large companies also pay late — and they also go bankrupt. Size is not security; the accounts and the payment history are.