What is the best way to request financial statements from privately held companies?

Answer: Here are some tips:

• Try to make your request for financial information seem routine. If challenged, explain the need for the information as simply a 'routine update.'
• Notify the sales department that you intend to request financial information because customers sometimes complain to their salesperson and/or ask their salesrep for the reason for the request.
• Always request a Balance Sheet, Income Statement, a Cash Flow Statement, and Notes to the Financial Statements. Each of these four items is important to properly analyzing your customer's financial condition.
• Request the financial data from a decision maker, not a clerk.
• If confidentiality is a concern, offer to sign a confidentiality or non-disclosure agreement.

It is not always possible to convince privately held customers to share financial information. Unfortunately, depending on the circumstances, it may be necessary to issue an ultimatum --- either the customer provides the financial data you need or you cannot provide the quantity of merchandise your customer needs.