Small business managers have been urged to credit check all of their clients to minimise their exposure to bad debt.
An investigation by a leading provider op factoring solutions discovered that three-quarters of organisations do not examine customers' credit history before doing business with them.
According to the group, the recession has led to rising levels of business fraud and many successful enterprises are putting themselves at unnecessary risk.
Its managing director said: "It is never a good time to take chances with new customers, but it is more important than ever when times are hard to ensure that you are trading with legitimate businesses."
He added that smaller companies should take "every opportunity" to minimise risk and credit check every client as policy.
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