If you’re a business owner, you’ve probably heard references to a D&B D-U-N-S® number. This number is a crucial part of owning a business, whether it’s large or small, but it can be confusing. Read on to learn more about where the D-U-N-S number came from, how it’s used, how to get set up with a unique D-U-N-S number, and most importantly, how it can affect your business.
What Is It?
The Data Universal Numbering System (D-U-N-S) is the most widely used method of identifying companies in the United States and is often used internationally as well. It is a nine-digit identification number that is unique to each business. A separate D-U-N-S number is issued for each physical location associated with a business, and is used to verify the existence and credibility of businesses across the globe. Any company doing business with the U.S. Federal Government is required to have one, and may receive one free of charge.
Where Did It Come From?
The D-U-N-S was introduced in 1962 by Dun & Bradstreet, a U.S.-based credit reporting agency that specializes in license information on businesses and corporations for the purpose of credit decisions, as well as business-to-business (B2B) marketing and supply chain management. D&B houses documentation for more than 220 million companies and businesses all over the world.
What Is It Used For?
D&B developed the D-U-N-S number as a key part of its credit reporting function, and it has become a worldwide standard for business identification. Some companies and entities require that businesses have a D-U-N-S number to do business with them, including the U.S. Federal Government, the European Commission, Wal-Mart, and the iTunes Store.
The D-U-N-S number is used to track and test the creditworthiness of businesses all over the world. Your D-U-N-S number establishes credit for a business by tracking credit activity similar to the way your personal Social Security number is used to track your personal credit history. The report created through your D-U-N-S number indicates your company’s profitability and stability, as well as its ability to pay its bills.
All businesses that have D-U-N-S numbers can be researched in the D&B global database by parties such as potential customers, suppliers, and lenders.
Why Do I Need One?
Any business that participates in federally issued grant programs, cooperative agreements, or contracts, is required to have a D-U-N-S number. Worldwide, use of this number system is a common standard. Additionally, it is required for businesses that bid on any government proposals to have a D-U-N-S number. Many corporations require that all suppliers and contractors have one as well.
Further, you’ll need to have a D-U-N-S number to receive any credit-based transactions like small-business loans.
What Do I Need to Get Set Up With a D-U-N-S Number?
When it comes time to register for your D-U-N-S number at DandB.com, make sure to have these things on hand:
- Legal name of the business
- Business headquarters name and address
- DBA or any other name recognized by your business
- Physical address including city, state, and ZIP code of each site
- Mailing address if it’s different from the physical address
- Telephone number
- Contact name and job title
- Number of employees at each physical location
Once you have compiled all the necessary information, registering for a D-U-N-S number is easy; just fill out the form, and your request will be processed within approximately 30 business days.
How Can It Affect My Business?
When you’re looking into buying a new home, financing a car, or any other kind of loan, potential creditors rely heavily on your personal credit score. Establishing and utilizing credit through your business is a similar process, but uses the D-U-N-S number assigned to the business instead of a social security number.
Your D-U-N-S number is tied to a file that contains your company’s credit report. Unlike personal credit, there isn’t a single number that sums everything up; instead, the report contains multiple scores and ratings. Of particular note is a company’s PAYDEX® score, which is a vital asset when bidding on projects. Those that don’t have one may be required to jump through more hoops to show their company’s financial stability.
Generally speaking, all businesses should register for a D-U-N-S number, and do everything in their power to keep their credit scores in an acceptable range. Establishing your D-U-N-S number is the first important step in showing the world what your company is made of, and what you are capable of doing.