Supplier due diligence is one of those disciplines that finance and procurement teams know they should be doing thoroughly, but often compress under time pressure. A supplier comes recommended, the price is right, the samples look good, and before long someone has signed a contract without ever checking whether the company filing those professional-looking invoices has actually filed its accounts on time, or whether the director behind it has a history of dissolved entities. I’ve seen this go wrong at every level, from start-ups to FTSE-listed procurement teams, and the pattern is almost always the same: the early warning signs were there in the public data; nobody looked.
This guide is for procurement managers, finance directors, and anyone in a UK business who is responsible for onboarding new suppliers or managing ongoing supply chain risk. The approach here combines free public registry data with commercial credit intelligence to build a picture that is both rigorous and proportionate to what you’re actually buying.
Why public registry data is your starting point, not your finishing line
Companies House is the obvious first stop when vetting UK suppliers using Companies House data, and it is genuinely powerful if you know what you’re looking for. Every UK limited company is required to file confirmation statements and accounts. The filing history alone tells you a great deal: a company that consistently files late, or has had its accounts overdue notices appear, is already showing signs of poor administration at minimum, and potential cash flow strain at worst.
When you pull a company record on Companies House, go beyond the headline registration date. Look at the following in sequence.
Incorporation date and company type. A supplier claiming decades of experience but incorporated three years ago warrants a question. They may have restructured from a previous entity, which is fine, but you want to know why.
Persons with significant control (PSC) register. Who actually owns this business? The PSC register has been mandatory since 2016 and reveals beneficial ownership. If the PSC entry lists an overseas holding company rather than an identifiable individual, that is not automatically a problem, but it does add a layer of opacity worth exploring.
Director history. Look up the directors individually. The Companies House beta search lets you view all company appointments associated with a given individual. A director with five dissolved companies in five years is a material flag. This is different from an entrepreneur who has built and exited businesses cleanly; the filings will usually make that distinction obvious.
Charges register. If a supplier has registered charges against their assets (essentially secured lending), you need to understand the scale of that relative to their trading activity. Significant fixed and floating charges held by lenders can affect your position as a creditor if things go sideways.
What Companies House cannot tell you
The public registry gives you legal structure, ownership, and historic filing behaviour. What it does not give you is a real-time view of financial health, payment behaviour, or how a supplier treats its own creditors. That is where commercial credit reference agencies come in.
In the UK, the main providers for business credit intelligence are Experian Business, Creditsafe, and Dun & Bradstreet. Each has a slightly different methodology and different data sources, so if the supplier is material to your operations, I’d argue pulling reports from at least two of them is worth the cost. Credit scores vary between bureaux; a supplier scoring well on one and poorly on another is itself informative.
The credit report will typically give you a payment performance score, derived from trade payment data shared by other creditors. This is the single most useful forward-looking indicator in the report. A company can look solvent on paper but be consistently paying invoices 60 to 90 days late, which is a reliable sign of cash flow pressure. You want to be on the right side of that payment queue.
The report will also include a recommended credit limit, which is calculated based on assets, liabilities, and payment history. If you’re planning to extend your supplier 60-day payment terms while they have a recommended credit limit of £15,000, something does not add up. Either your trading volume is too large for them to handle without strain, or their financials are weaker than their sales pitch implies.
County Court Judgements (CCJs) appear in credit reports too, and these are particularly telling for smaller suppliers. A CCJ means a court has formally ruled that a debt exists and has not been satisfied. One CCJ, satisfied promptly, is forgivable. Multiple unsatisfied CCJs are a serious concern, and any CCJ registered in the 12 months before you’re onboarding a new supplier should trigger a direct conversation.
Building a proportionate due diligence framework
Not every supplier needs the same level of scrutiny. A £3,000 annual spend on office supplies does not warrant the same process as a £500,000 contract with a sole-source software development partner. I tend to segment suppliers into three tiers based on spend and criticality, then apply a corresponding level of review.
For tier one suppliers (high spend, operationally critical, or where failure would affect your customers), run the full Companies House review, pull reports from two credit bureaux, ask for audited accounts directly if the most recent Companies House filing is more than 12 months old, and consider a site visit or video call with their finance director. Given how much depends on these relationships, the time invested is entirely justified.
For tier two suppliers, a Companies House check and a single credit report is usually sufficient, supplemented by trade references from two named customers you contact directly (not references the supplier selects and coaches).
For tier three suppliers, a basic Companies House confirmation of existence, registration age, and clean officer history is proportionate. You’re largely checking that the company is real and registered.
One thing worth building into your onboarding form is a requirement for suppliers to provide their Companies House number and registered address upfront. This sounds obvious, but I’ve seen procurement teams spend an afternoon trying to match a trading name to a legal entity because the supplier provided neither. Make it a mandatory field and the rest of the lookup takes minutes.
Keeping supplier risk intelligence current
Due diligence at onboarding is necessary but not sufficient. A supplier who passes every check in January can file a profit warning or accumulate CCJs by October. Most commercial credit platforms offer monitoring alerts, where you receive a notification if a supplier’s credit score drops significantly, if new charges are registered, or if director changes occur. For any supplier above your tier one threshold, turning these alerts on is straightforward and the cost is modest relative to the exposure you’re managing.
Annual reviews for critical suppliers should pull a fresh credit report and cross-reference it against the previous year’s filing on Companies House. If accounts show deteriorating margins alongside a worsening payment score, that is the combination that tends to precede supplier insolvency. Catching it a year early gives you time to dual-source or renegotiate rather than managing an emergency.
For UK businesses thinking about the broader operational risk dimension, the principles here dovetail with the kind of financial resilience planning covered in discussions around business interruption insurance and tech outage cover. Supplier failure is one of the most common triggers for operational disruption, and yet it rarely features in the scenarios businesses model in advance.
It is also worth noting that finance teams increasingly have access to better tools for this kind of ongoing monitoring. The shift to cloud-native finance platforms means data from credit bureaux can often be integrated directly into approval workflows, rather than sitting in a separate spreadsheet nobody checks. If your team has been thinking about ERP modernisation, the move to cloud-native ERP for UK SMEs is making exactly this kind of integrated risk view more accessible at mid-market budget levels.
A note on international suppliers
Everything above applies cleanly to UK-registered limited companies. For overseas suppliers, the process gets more complex but the logic is identical: find the equivalent public registry (Germany has the Handelsregister, France has the Registre du Commerce et des Sociétés), use a credit bureau with international coverage (Dun & Bradstreet and Creditsafe both operate internationally), and apply additional scrutiny to any suppliers operating through jurisdictions with weak corporate transparency requirements.
UK finance and procurement professionals working with overseas entities should also be aware of HMRC’s guidance on supply chain fraud, particularly in high-risk sectors, since the tax authority expects businesses to take reasonable steps to verify that their supply chain does not involve missing trader fraud. That is a separate but overlapping discipline from credit risk, and one worth understanding if your business reclaims significant VAT on purchases.
Vetting UK suppliers using Companies House data is not glamorous work. But it is the kind of work that occasionally saves a business from a genuinely damaging situation. The data is there, most of it is free, and combining it with a credit report takes less than an hour per supplier. The cost of not doing it, as anyone who has dealt with a key supplier entering administration will tell you, is considerably higher.