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How to vet a new supplier: a 10-minute due-diligence checklist

Before you pay a deposit or place a big order, run this quick checklist.

Why 10 minutes now saves you thousands later

Most bad-debt and non-delivery horror stories start the same way: a new supplier looked fine, the price was right, and nobody checked the basics before money changed hands. The good news is that the UK keeps a huge amount of company information in free public registers, and you can run a solid due-diligence check in about ten minutes before you pay a deposit or place a big order. Here's a practical, time-boxed checklist you can run every time.

The 10-minute checklist

1. Confirm the legal entity and company number (1 min). Get the exact registered name and the eight-digit company number, not just the trading name on the invoice. Trading names ("Dave's Roofing") aren't registered and tell you nothing. The company number is the anchor for everything else you'll check. If a supplier can't or won't give you a company number, that's your first flag: they may be a sole trader (which is legitimate, but changes how you assess risk) or they may not want to be found.

2. Check it's active, and how long it's been trading (1 min). On the Companies House register, confirm the status reads "Active", not "Dissolved", "In liquidation", or "Proposed to be struck off". Then look at the incorporation date. A company formed three weeks ago taking a large upfront payment deserves far more caution than one that's traded steadily for eight years. New isn't automatically bad, but new plus large deposit plus pressure to pay fast is a pattern worth slowing down for.

3. Verify the registered address (1 min). Look at the registered office address. Is it a real trading premises, a residential home, or a formation-agent mailbox shared by hundreds of companies? None of these is proof of anything on its own, but a supplier claiming to be a large operation while registered at a virtual office in a different city is worth a question. Cross-check it against the address on their website and invoice.

4. Check the accounts are up to date (2 mins). Every company must file accounts and a confirmation statement annually. On the filing history, check when accounts were last filed and whether the next set is overdue. Overdue accounts are one of the most common early warning signs of a business in trouble or one that's stopped being run properly. Also note whether they file "micro-entity" or "dormant" accounts, which suggests a very small or inactive company, again useful context if they're presenting as a major supplier.

5. Look at the people behind it (2 mins). Check the directors and persons with significant control (PSCs). How many directors are there, and how long have they been in post? Then search each director's name on Companies House to see their other appointments. A director with a long trail of recently dissolved or liquidated companies in the same sector is a serious red flag, that's the classic "phoenix" pattern where a business folds owing money and reopens under a new name. Watch for mass resignations or a sudden change of directors just before you're due to pay.

6. Search for insolvency and Gazette notices (1 min). The Gazette is the UK's official public record and publishes formal notices of winding-up petitions, administrations and liquidations. Search the company name there, and cross-reference the Insolvency Service's registers. A live winding-up petition means other creditors are already trying to shut the company down, and any money you pay could be at serious risk. This is a hard stop, not a "proceed with caution".

7. Check nobody's disqualified (1 min). The Register of Disqualified Directors lists people banned from running a company, often for the exact conduct that hurts suppliers and creditors. If someone associated with the business appears there, or is running it despite a ban, walk away.

8. Sense-check the website, VAT and real-world footprint (1 min). Does the website match the company you've just researched, same name, same number, same address? If they quote a VAT number, you can validate it on the government's VAT checker. Look for a proper physical presence, consistent contact details and reviews that read like real customers. Mismatches between the "professional" website and a thin, brand-new company record are worth pausing over.

Turn what you found into a payment decision

The whole point of the checklist is to size your exposure sensibly. If everything's clean, a long-established active company, accounts filed on time, stable directors, no notices, then normal terms are reasonable. If you see mild flags, protect yourself: pay in staged instalments tied to delivery, keep the deposit small, use a credit or debit card (which gives you chargeback and Section 75 protection on larger purchases) rather than a bank transfer, and get everything in writing. If you see hard flags, an active winding-up petition, a disqualified director, or a phoenix trail, don't extend credit and don't pay upfront. Ask for goods on delivery, or don't trade at all.

None of this is financial or legal advice; it's what the public record shows, read sensibly. But running these eight steps consistently will catch the great majority of suppliers you shouldn't be paying in advance.

Do it in one search

Running all eight checks by hand across Companies House, The Gazette and the insolvency registers is doable, but it's a lot of tabs. TradeChecker pulls the same free official data into a single plain-English verdict, so you can see at a glance whether a company is a TRADE, CAUTION or AVOID. Before you pay that next deposit, check a company free, it takes seconds, or browse the companies we've checked to see how a real report reads.