Client Credit Check:Vet a Client in Twenty Minutes
Client credit check in twenty minutes: three questions, a ceiling per client, and the terms to change when you cannot verify. Do it before you extend credit.
A client credit check is three questions: are they solvent, do they have a payment reputation, and is the entity signing the same entity that will pay? Do it before significant work begins. It takes about twenty minutes, and skipping it is how one invoice becomes a crisis.
Client credit check: how to check a client before extending credit
You would not lend a stranger a serious sum because the meeting went well.
Yet that is exactly what a large invoice on thirty-day terms is. You deliver, you wait, and you hope. The client has your work. You have a promise. Everything depends on whether the promise is any good.
Most solopreneurs never frame it this way. They think of invoicing as a formality that follows the real work. But the moment you agree to be paid later, you have become a lender, and you did it without a single question.
The verdict is blunt. For anything material, do a minimal client credit check. One large unpaid invoice can be genuinely serious for you. There is no finance team and no second income stream catching it. And the check that would have prevented it takes twenty minutes.
Think like a lender, in three questions
Forget the idea of due diligence on a grand scale. You are not buying the company. You are asking whether they will pay you.
| Question | What you are really asking | If the answer is bad |
|---|---|---|
| Are they solvent? | Can they pay at all, on the day it is due? | Ask for payment in advance or a larger deposit. Or keep the work small. |
| Do they have a payment reputation? | Do they pay suppliers on time, or do they make suppliers wait? | Shorten the terms, split the job into milestones, set a lower exposure limit. |
| Is the signer the payer? | Does the legal entity that agrees to the work match the one that will send the money? | Fix it in the agreement before you start. Invoice the right entity. |
Three questions. Twenty minutes. That is the whole client credit check, and notice that none of the bad answers means "walk away". Most of them mean "change the terms". That is the point of checking: it moves you from yes or no to how much risk, on what terms.
Free guide · 22 pagesCollect what you already earned.The Getting Paid Playbook: invoicing, terms and collections, the cheapest capital you will raise.Get the free guide →Start the client credit check with the entity
Start with the dullest question, because it catches the nastiest surprises.
The person you spoke to is not the thing that pays. A company does. Which company? Is the name on your agreement the same as the one on your invoice, and the same as the one that will actually approve it? If you invoice the wrong entity, the invoice does not bounce. It sits.
The guide puts it bluntly in the checklist: the entity being invoiced must be the entity that agreed. Write it down at the start. Ask for the legal name, the address and the inbox. It is also the same list of things you need to get the invoice processed, so you are asking once for two reasons.
If the entity changes halfway through, be suspicious of your own paperwork before anyone else's. Fix it in writing, with the new name, before the next invoice goes out.
A good meeting is not evidence
Here is the trap. The calls go well. The client is friendly, quick to reply, keen on your work. You warm to them. Your guard drops exactly when the amount goes up.
None of that tells you whether the money arrives. Charm is not solvency. Enthusiasm is not a payment record. A client can love your work and still sit at the back of their own accounts queue.
So separate the two. Enjoy the relationship. Check the facts. You can do both, and the clients who are what they seem will not mind being asked who approves invoices and what the entity is called.
The ones who mind are telling you something, much earlier than you would otherwise have found out.
Then ask how they pay
Who approves the invoice? On what cycle do they run payments? Does it need a purchase order or a reference?
Look at what this does for you. It is a process question, so nobody takes offence. But the answers are also a quiet credit check. A client who knows exactly how their payments work is usually organised. A client who cannot tell you who approves anything is telling you something about the next invoice.
And remember the person who bought from you is often not the person who pays you. They may not know there is a problem until you tell them. A named contact on the payment side turns a silent delay into a short exchange. That matters more as clients get larger.
Use what you already know
You do not start from zero with a returning client. You have their payment history, if you keep it.
Payment behaviour is one of the clearest signals about a relationship. Chronic late payment often travels with other patterns: excessive demands, scope creep, the loudest complaints. Tracking who pays how quickly gives you an unusually honest view of account quality.
Revenue from someone who pays at a hundred and twenty days is worth materially less than the same revenue from someone who pays at fifteen. Almost nobody makes that comparison. Make it. It is the only credit check you can run for free, with data nobody else has.
This is why the monthly look at what is overdue matters. Thirty minutes. It tells you who to extend more credit to, and who to put on shorter terms.
Free assessmentHow trapped are you, really?Take the Corporate Suffocation Index, the free solopreneur readiness assessment.Take the assessment →Set a ceiling before you need one
Decide the maximum you are willing to carry with any one client. A number. Not a feeling.
Why? Because without a ceiling, exposure creeps. One more job on the same account, one more invoice before the last is paid. Each step feels small. Added together, you are lending a stranger a serious sum, one polite yes at a time.
A ceiling gives you a clean sentence to say. "I'll start the next piece once the current invoice is settled." That is not accusatory. It is a rule. And if you do reach it, you can lean on the stopping point you decided earlier: where work pauses while you are unpaid. The reasoning for that is in how to set payment terms for clients.
When you cannot verify, change the terms
Sometimes the check comes back thin. You cannot tell. The client is new, the information is sparse, the amount is large.
Do not guess. Move the risk instead. Ask for a deposit, or payment in advance, or split the job into milestones so that your exposure stays small at every stage. The wording for that is in how to get paid before you start the work.
This is the elegant part. You do not need to know the client is safe if you have arranged the deal so that being wrong is cheap. A deposit is a credit check that pays you.
Be honest about the limit
A check is not a guarantee. A solvent client can still pay late. A good one can hit a bad quarter.
And do not turn the check into suspicion. Most late payment is a process failure, not unwillingness. The aim is not to find reasons to refuse work. It is to know what you are lending, to whom, and on what terms, so that if something goes wrong you can see it coming. When it does, how to write an invoice reminder ladder is what carries you through.
Free guide · 22 pagesCollect what you already earned.The Getting Paid Playbook: invoicing, terms and collections, the cheapest capital you will raise.Get the free guide →A twenty-minute routine
- Confirm the legal entity that will sign, and that it matches the one you will invoice.
- Ask how they pay: who approves, what cycle, what reference.
- Look for any sign they pay slowly or are short of cash.
- Check your own history with them, if you have one.
- Decide your ceiling. Adjust the terms if the picture is thin.
Do this before significant work begins, not after the first invoice stalls. It is dull. A client credit check is also the cheapest insurance in your business.
Free assessmentHow trapped are you, really?Take the Corporate Suffocation Index, the free solopreneur readiness assessment.Take the assessment →Frequently asked questions
Do I need to check every client?
No. Check the larger ones, and anyone you know nothing about. For small amounts, asking for payment in advance does the work of a check without the effort.
What does a client credit check involve?
Three things: whether they are solvent, whether they have a payment reputation, and whether the entity signing is the entity that will pay. It takes around twenty minutes.
What if I cannot verify a new client?
Change the terms instead of guessing. Ask for a deposit or payment in advance, or use milestones so your exposure stays small at every stage.
Is extending credit really that risky for a solo business?
One large unpaid invoice can be genuinely serious for you, because there is no finance team behind you. That is why a ceiling per client is worth deciding in advance.
The full method, with the checklists, is in The Getting Paid Playbook, a free 22-page playbook.
How trapped are you, really?
Take the Corporate Suffocation Index, the free solopreneur readiness assessment.