Everyone born in the United States receives a unique, nine-digit Social Security number at birth. Without this identifier, you can’t enjoy many of the perks that American citizens and legal residents take for granted, including retired and disabled worker benefits. Of course, you also need a Social Security number to file your taxes.
Business entities don’t get – or need – Social Security numbers. However, they can obtain a unique, nine-digit identifying number through a system that’s nearly as ubiquitous as Social Security: the Data Universal Numbering System, or D-U-N-S. If you own your own business or are thinking about starting one, you should know more about the uses, benefits, and drawbacks of having a D-U-N-S number.
What Is D-U-N-S? Origins and Eligibility
The Data Universal Numbering System is a business identification database established in 1963 by Dun & Bradstreet, a private company. According to Dun & Bradstreet, virtually any distinct business entity – nonprofits, sole proprietorships, LLCs, partnerships, corporations, and even government agencies – can apply for and receive a unique, nine-digit D-U-N-S number. There are currently 225 million of them. D-U-N-S numbers may be issued with or without dashes for readability: XX-XXX-XXXX or XXXXXXXXX.
Unique numbers may also be assigned to subsidiaries and branches of larger firms. For instance, if Acme Widget Company wholly owns Acme Distribution Company, the two firms could have distinct D-U-N-S numbers. And, technically, any separate business location – the two Chipotle restaurants on opposite sides of town, for instance, or even two separate corporate divisions that occupy different suites in the same building – can apply for a unique number.
D-U-N-S + 4
However, at this level of organization, a company may prefer to use a D-U-N-S + 4 number. This is a parent- or subsidiary-level D-U-N-S number with a four-digit suffix that helps vendors, customers, and government agencies identify smaller units for accounting purposes. Unlike the main D-U-N-S database, Dun & Bradstreet doesn’t endorse or maintain these four-digit suffixes – companies create and manage them internally. If you own a small business, you probably won’t need to worry about D-U-N-S + 4 right away.
Why Do You Need a D-U-N-S Number?
Each D-U-N-S number conveys certain information about the business it represents:
- Verification of Existence and Operation. For your suppliers, customers, contractors, and anyone else who might do business with you, your D-U-N-S number signifies that your company or organization exists and is operational. When a business ceases to operate, its entry is closed to reflect that.
- Demographic Information. Your D-U-N-S entry is an official, highly detailed directory listing that lets others find and learn about your company. It includes your company’s physical location, contact information, ownership, business structure, industry, employee count, aliases (“doing business as” designations), and historical financial data.
- Corporate Relationships. D-U-N-S numbers are assigned randomly, so their digits don’t carry any special meaning. However, they do reveal connections between related companies. If your company is part of a larger corporate hierarchy, your D-U-N-S entry reflects this by linking to the entries of your subsidiaries, branches, and corporate parent.
Your D-U-N-S number also confers many privileges. You need one to apply for a government contract and, in some places, to do business in a foreign country. It also allows your lenders and suppliers to obtain information about your business, boosting your credibility and possibly making it easier for you to get a favorable loan or credit line.
You can also glean information about other companies by using their D-U-N-S numbers. This can help you find potential clients or partners – and make educated decisions about whether and how to do business with them.
Key Characteristics of a D-U-N-S Number
Each D-U-N-S number has several important characteristics:
- Permanence. Once issued, a D-U-N-S number is permanent – regardless of changes in ownership or domicile, or financial events like Chapter 11 bankruptcy. If an entity liquidates its assets and ceases to operate, its D-U-N-S number is never reissued.
- Global Use. D-U-N-S is pervasive and global. As of August 2013, there were about 225 million unique D-U-N-S entries from businesses in about 190 countries. No other business registry, even at the international level, has as many entries.
- Compatibility With National Business Registries. Many governments use D-U-N-S as a de facto business registry for companies they work with. For instance, the United States’ Central Contractor Registration system uses D-U-N-S as its primary method of business identification: To apply for a government contract, you need a D-U-N-S number first. In many countries, D-U-N-S is the only accepted means of identifying businesses headquartered in other countries, even if they don’t do business with the local government. In Germany, a national business registry called Unique Partner Identification Key (UPIK) uses D-U-N-S numbers to sort businesses.
How to Apply for a D-U-N-S Number
You can apply for a D-U-N-S number through Dun & Bradstreet. It’s free to do so, though D-U-N-S registration is included in certain Dun & Bradstreet paid credit monitoring and business intelligence packages, such as the Small Business Starter.
Before applying, check to see if your company already has a D-U-N-S number – this may be the case if you purchased the business from a previous owner. You can search for your company, by name, through D&B’s online D-U-N-S database or call (866) 705-5711 to ask a representative.
If you don’t have a D-U-N-S number, you can request one by phone at the above number, which is staffed between 8am and 6pm, seven days per week, in all U.S. time zones. You can also apply online through Dun & Bradstreet’s website or the Federal Government’s Central Contractor Registration (CCR) system, the portal for all U.S. government contractors. From the time you submit your application, it can take up to 30 days to receive your number. Paid D&B plans, such as the Small Business Starter, can speed the process to two business days.
To apply for a D-U-N-S number, you need to provide the following:
- The name, address, and founding year of your company
- The name of its owner
- Its legal structure (partnership, LLC, sole proprietorship, and so on)
- A basic description of its business activity
- Total employee count (full- and part-time)
What Can You Do With One?
The information contained in your D-U-N-S entry creates opportunities for your business, as well as other entities that wish to do business with you:
- Keep Accurate Business Data. Dun & Bradstreet claims to spend more than $1 million per day to maintain the D-U-N-S database, verifying and updating each entry’s data. Accordingly, you can trust your D-U-N-S entry, and those of the companies you do business with, to be accurate and up-to-date. Many electronic business directories, such as Manta, offer no such guarantee.
- Work With Government Entities. If you don’t have a D-U-N-S number, you can’t apply for a contract with any government agency or secure a Small Business Administration loan. You also can’t get work with the United Nations and many foreign governments, though you should check with the appropriate sources if you want to do business with an overseas entity.
- Do Business With Foreign Companies. Even if you don’t need to work with a U.S. or foreign government agency, you may still want to do business with foreign private companies. Since D-U-N-S is the de facto business registry in many countries, having a D-U-N-S number is the easiest way to establish your legitimacy for potential clients overseas. Also, depending on the local government’s policy, your company may need to obtain a D-U-N-S number before setting up a branch or subsidiary in another country.
- Establish Credibility With Lenders. As part of their due diligence, lenders may refer to your D-U-N-S entry for basic financial and demographic information about your business. They may also purchase credit reports and business intelligence on your company from Dun & Bradstreet. This information is proprietary to Dun & Bradstreet, so if you don’t have a D-U-N-S number, prospective lenders may have an incomplete picture of your company’s finances and operations, potentially making them less likely to give you a loan.
- Maintain Better Risk Management With Clients. If your company extends lines of credit to its customers, you can use their D-U-N-S numbers to better understand their overall health. For instance, even if one of your client companies appears financially sound, its parent company may be in trouble. By revealing the link between the two, D-U-N-S can help you spot a potential problem before the company goes out of business or cancels the contract.
- Maintain Better Purchasing Power With Suppliers. Your company may do business with multiple suppliers that operate under the same corporate umbrella, but the relationship may not always be apparent. By analyzing each supplier’s D-U-N-S entry, you can tease out hidden corporate relationships and use them to your advantage during supply contract negotiations. For instance, instead of buying from four different suppliers owned by the same parent company, you may be able to buy four times as much from a single supplier – and secure a bulk discount in reward.
- Receive Better Information About Prospects. If you run a B2B company, your success depends on your ability to identify the most promising prospects and turn them into paying customers. With demographic, financial, and contact information for millions of companies, the D-U-N-S database allows you to find and reach out to the firms most likely to require your products and services.
- Expedite Your Application for an SSL Certificate. If your company wants to set up an e-commerce portal, it needs to apply for an SSL certificate, an essential security feature for online transactions. Organizations that issue these certificates typically require thorough contact, ownership, and demographic information about each applicant. Your D-U-N-S entry contains all of that information, allowing the SSL issuer to quickly verify your company’s identity and activate your certificate. Without a D-U-N-S number, your SSL issuer may request a bevy of faxed or emailed documents, substantially increasing the length and complexity of the application process.
Having a D-U-N-S number confers a lot of benefits, but it’s also important to understand the system’s limitations and potential drawbacks.
- Dun & Bradstreet Profits From D-U-N-S. Though D-U-N-S is the business registry of choice across much of the world, Dun & Bradstreet doesn’t maintain it out of the goodness of its heart. Once you’re in the database, D&B (and Dun & Bradstreet Credibility Corp, a former subsidiary that offers similar services) regularly pushes you to sign up for services such as credit monitoring and business intelligence, which could become annoying.
- Virtual Monopoly on Business Identification. In the U.S., European Union, Australia, and elsewhere, D-U-N-S is by far the most popular and comprehensive business identification database – to the point where it has no real competition. This situation may be increasing the system’s overall cost to the governments and companies that use it. For instance, according to the Government Accountability Office, the Federal Government’s contract with D&B is worth more than $150 million as of 2010. To see if another system would be feasible (and cheaper), or perhaps just to pressure D&B in future contract negotiations, the government is looking at alternative business identification frameworks. However, it’s not clear how much, if anything, the switch to another system would save.
- Not Completely Transparent. The information contained in D-U-N-S is proprietary to Dun & Bradstreet. For starters, this means that D&B isn’t obligated to say how it’s sourced. It also isn’t obligated to sell or transfer any D-U-N-S information, which could hamper a future switch to another business identification system. And, despite its status as the Federal Government’s de facto business registry, D&B isn’t obligated to comply with Freedom of Information Act (FOIA) requests from members of the press or public, making it difficult to independently verify the information in its database.
Dun & Bradstreet calls D-U-N-S “Social Security numbers for businesses.” In reality, it’s even more pervasive than Social Security. The system is used in dozens of countries around the world, including the U.S., Australia, and the European Union, and confers numerous benefits on businesses that participate. Though you don’t need a D-U-N-S number to operate, having one can open doors that would otherwise remain shut.
At the same time, you should be aware of potential issues surrounding this system, including questions about privacy. As with any database, participating in D-U-N-S creates a public footprint that lets others – good and bad – find your company. For all the system’s perks, your decision to get a D-U-N-S number must be a personal one.
Does your business have a D-U-N-S number?