From time to time, you may have a new supplier that you want to do business with, but now it’s got to go through their credit department. They’re going to call for a credit reference. How should the accounting department handle it? I’d like to give them core information that they need, but not any more.

They probably will ask for a full set of financial statements, but I think when you let the financials out to outsiders you can lose control of the information. I prefer to leave it to more summary type of information and balance sheet data on a selective basis.

For example, it could be just a high level balance sheet and say that the profit and loss is confidential. They’ll get a feel for the profitability though the balance sheet with the positive retained earnings that you’re showing.

They may also ask for some trade references and I’m fine with those. You should have a list of trade references that you would give out, but rotate it around so you’re not always relying upon the same two or three trade references. When you’re a startup company that may be harder to do, but see what you can do about it as your company grows.

They may ask for other confidential information, such as on the ownership structure. You have the right as a private company to indicate that such information is confidential. However, indicate you’ll be happy to supply core information that’s truly pertinent to evaluating your ability to pay both now and in the future.

So when you have the credit reference request, don’t just hand over everything they want. Be firm and be selective, but be transparent. Show them you’re open with that particular information, but that you are a private company and you’re going to exercise some of your benefits to keep some of that information private and out of public hands. Just give what’s needed to demonstrate your ability to pay.