We have wrote extensively on what a good credit application looks like and we have even put out a free ebook on how to extend business credit, but when extending credit internationally there are some important additions you may want to include.
Basic Format Changes
There are a few small things you will want to change to make it easier for your international customers. First, you should leave more space for phone and fax numbers to accommodate the extra space needed for country codes. While this may seem obvious, you should also add a blank for the country. Many credit applications will forgo this because it is assumed your customer is in the US, but for international customers this information is crucial
Value Added Tax
While a Value Added Tax (VAT) is not as commonly known here in the US, it is big in the EU. It is essentially a tax on the amount by which the value of an product has been increased at each stage of its production or distribution. Each company is issued a VAT number by the chamber of commerce and it is necessary to include this number on your credit form. It can help verify their existence, as well come in handy for any paperwork down the line.
In many foreign countries, checks are very rarely, if ever, written for business to business transactions. This means you will need to make sure you have the proper banking information blanks on your credit application. In the EU this will take the form of an IBAN number and a BIC code. The IBAN number is essentially a bank account number. The BIC code will then distinguish the bank the account is with. If you are doing business outside the EU, you should check to see what standard is used.
Some countries will have information that you do not account for but is still necessary. This could be special markings that must be on packages, different banking practices, or a host of other potential issues. We suggest leaving an extra blank or two on the form designated for such extraneous information.
Doing business internationally can be very beneficial in growing your business, but it also leads to a host of logistical challenges that you have to account for before jumping in. This first step is making sure you have all the necessary information and a properly formatted credit report will help.