Avoid cash flow nightmares - Dun & Bradstreet Small Business Services cash flow checking service

Home Office Computing, Jan, 1995 by Chris Oakes

Cash flow is the lifeblood of small business. And all it takes is one deadbeat client, shoddy supplier, or shady investment dealer to wreak havoc on your finances. Of course, entrepreneurs could protect themselves by running credit checks on every firm they do business with. But who's got the time7 Now for $60 and a toll-free call, Dun & Bradstreet's Small Business Services (SBS) will scrutinize the financial health of any company--from the contracting firm you're hiring to remodel your home office to the prospective client you're about to extend credit to--within minutes.

Tapping its database of 10.5 million companies (updated 623,000 times a day), D&B will track a company's payment history (indicated as prompt, slow, or past due), creditor's filings, and names and addresses of the principals. It will also research such public information as a firm's federal bankruptcy court filings, outstanding lawsuits, judgments or liens, collection agency referrals, bank balances or loans, as well as the highest credit extended to date.

Moments after processing your request for information, the service faxes (or mails) back a customized report. In plain English and free of financial doublespeak, the summary also includes a recommendation on whether to conduct business with the firm and, if you choose to do so, under what terms. Then, for no additional charge, you can discuss by phone the details of your impending transaction with a financial adviser, who will answer follow-up questions, point out red flags, and even investigate the company further if you're still unsure.

"The system is highly interactive, taking customer background information and relating it to D&B's information," says SBS's assistant vice president Larry Winters. "And once we find out the level of risk, we give a recommended action step." For instance, one caller--about to shell out $5,000 COD for rare coins from a mail-order company--saved a bundle after the search revealed that the parent company had filed Chapter 11. Another entrepreneur, who was ready to buy out a fully equipped bake shop, phoned in for a credit check. After looking into the Uniform Commercial Code filings, it was discovered that the equipment was actually leased and would therefore not be included in the purchase price. D&B alerted nearly 12,000 customers last year alone to similar high-risk ventures. The credit reports, however, are just pan of a suite of D&B offerings available to small-business owners. With its debt collection service, for example, you can have attention-getting letters sent out to slow-paying and past-due accounts (see this month's Legal Matters column for more ideas). The price: $25 for two notices mailed within a three-week span. And with the early warning service, costing $15 per account, D&B's database will monitor selected companies on an ongoing basis--vital for entrepreneurs who rely on a few clients for the bulk of their business-so you can prepare your firm for any cash flow dry spells. For more information on D&B's Small Business Services, call (800) 544-3867.

...MCI Communications Corp. for clearing the way for the first direct-dial service to Cuba. At press time, MCf only says it expects service to begin "within a few months." Under a new international agreement, Cuban residents can also make collect calls back to the United States. Previously, callers to that country had to prearrange all phone conversations and wait long periods before making contact. To promote its new service to Cuba, MCI is offering 60 percent off international rates for one month, up to $100. The company also provides bilingual billing, operators, and customer service. For more information, call (800) 950-4652. information superhighway telemarketers who promise outrageous returns to investors who fork over $5,000 and more to obtain wireless cable licenses. The licenses, investors are told, can be either resold or leased to big telecommunications companies. Unfortunately, many are for areas unsuitable for wireless cable--and brokers are skimming so much in commissions that nothing is left to effectively run a company. "These are risky ventures in a technology that may be obsolete in two years," says Bill McDonald, chief of enforcement at the California Department of Corporations. Unregistered promoters have been tracked down in the Sun Belt states.