New client wants a trade reference...

[Adlopa]

Quick question. I've been asked for a trade reference by a potential new client (there's no agent). After asking for clarification, I was told that this is something they ask of all new vendors and goes in hand with them performing a credit check.

I'm still waiting for their reply to my "Huh, what?", but has anyone encountered anything similar?

Surely, as the service supplier, I'm the one who should be asking for a trade reference, since I'll be doing work on credit, technically.

(As an aside, do credit checks for business work like consumer ones? My business doesn't deal with suppliers, other than my accountant, and has never had a line of credit –*and hence presumably has no credit rating.)

[GillsMan]

Most of MyCo Ltd's work is proper b2b direct with clients. It's rare that I get asked for a trade reference, but it does happen. Earlier this week I filled out an RFI where they asked for a reference about MyCo Ltd's work with a client in the same sector. FYI, MyCo Ltd has employees so we're not a one-band band.

In summary, it doesn't happen all the time, but it does happen and is reasonable.

Oh, and don't even think about asking your client for references from previous suppliers!! (But do credit check them).

[Adlopa]

Hm, seems weird to want a credit reference from someone not asking for credit. I guess I'll just point them at the only supplier I use –*my accountant –*and leave them to sort something. Thanks for the info!

[Lance]

Hm, seems weird to want a credit reference from someone not asking for credit. I guess I'll just point them at the only supplier I use –*my accountant –*and leave them to sort something. Thanks for the info!

It's not uncommon. Standard governance for large companies, and a lot of smaller companies follow similar basic steps.
I prefer to know that any organisation I'm doing business with is reputable and above board. Whilst those checks aren't a guarantee they are low-cost.

[GillsMan]

Hm, seems weird to want a credit reference from someone not asking for credit. I guess I'll just point them at the only supplier I use –*my accountant –*and leave them to sort something. Thanks for the info!

Wait, sorry I didn't see that it was a trade reference they wanted. I thought it was just a reference from a former client (i.e. to check you leave clients happy etc). If it's a trade reference they want then again, that's unusual but not unheard of.

Some RFIs we get asked to complete from prospective client ask for information about our turnover, profits, etc. It's all about making sure their suppliers won't go bust in the middle of service delivery. I turned down the opportunity to complete an RFI recently when the questions about turnover and profit were the first questions on the form, and they asked us to specify our turnover in £m. Our turnover is less than £1m, so we knew we wouldn't be invited to the next stage.

So yeah, again, it happens, not all the time though.

[Adlopa]

Yep, they were very clear about it being a *trade* reference, but couldn't/wouldn't elaborate about why – "it's just the way we work". Then after I pointed them at my accountant (the only 'supplier' I have), they explained what they actually wanted (to the accountant). And guess what? It's a client reference. The ninnies.