Sorry but your comments about credit reports are completely unfounded. I work at a senior level in credit and risk management and therefore have a very in depth knowledge of the contents of such reports and their application.
They should never be used as a sole reference and are worthless if you do not know how to interpret the data correctly, but in the right hands they can still provide very valuable information and guidance. Small limited companies aren't a problem, they only really fall over when you're looking at sole traders. Abbreviated accounts are also fine you can still extract plenty from the information they provide - they don't show turnover or profit but you can still see net worth, working capital, acid test ratios etc, along with public data such as court judgements, winding up petitions, length of time in business etc.
Filed accounts can certainly be well out of date and obviously you take then in to account when reviewing the report, but even then if the trend in previous years is showing losses every year it's unlikely to have turned around massively in the current year and therefore still represents a higher risk. The remaining data will all be accurate to within a few days.
For instance, if you are looking at paying a school £6k up front and they come across as very professional and friendly, however you run a credit report that tells you they are losing vast sums of money each year and have recently incurred a number of county court judgements - are you really still going to risk your money with them? You're a fool if you do, and you can only get that sort of information from the credit report - they aren't going to tell you that when you go and visit!
Let me give you an example from one of the many schools I considered;
Oct 2007 - Net Worth - £(70,000)
Oct 2008 - Net Worth - £(125,000)
Oct 2009 - Net Worth - £(200,000)
Ok so the last accounts filed are nearly two years out of date. However, this shows two things. Firstly in recent years the company has been losing around £60/70k per year - this isn't a sustainable model therefore unless something does or has changed it's likely decisions will need to be made. Yes it may have turned around in the last year or so, but given the economy that's probably unlikely. It also tells me they are now a month late filing their accounts with Companies House therefore will be incurring fines and potentially a Notification to Strike Off will be issued if they do not file asap. I wouldn't provide this company any credit facilities, and I certainly wouldn't give them £6k of my own money, despite the fact the people are lovely and the school seemed excellent.
Last edited by Ds3; 2nd Sep 2011 at 10:53.