Data universal numbering system duns number

What Is a Data Universal Numbering System (DUNS) Number?

The Data Universal Numbering System (DUNS) Number is a unique, nine-digit numerical identifier assigned to a single business entity by Dun & Bradstreet (D&B). It serves as a global standard for identifying businesses within the broader category of business finance and credit reporting. This proprietary number helps to establish and track a company's business credit profile, providing a consistent way for various organizations to identify, verify, and assess businesses worldwide. The DUNS Number is distinct to each business location, meaning a company with multiple branches may have multiple DUNS Numbers.

History and Origin

The Data Universal Numbering System was developed and introduced by Dun & Bradstreet in 1962 to support its growing credit reporting practices.² Its creation provided a standardized method for tracking and organizing information on businesses globally, becoming a widely recognized identifier. Over decades, the DUNS Number gained significant traction, especially within the United States federal government, which mandated its use for entities seeking federal grants and government contracts from October 2003. However, as of April 2022, the U.S. federal government transitioned from using the DUNS Number to a new Unique Entity Identifier (UEI) created within SAM.gov. This transition aimed to streamline the identification process and reduce reliance on a proprietary system. Further information on the Unique Entity Identifier can be found on the System for Award Management (SAM.gov) website.

Key Takeaways

• A DUNS Number is a nine-digit identifier assigned by Dun & Bradstreet (D&B) to individual business entities.
• It is used globally to identify and track businesses for purposes such as credit assessment, vendor relationships, and regulatory compliance.
• Obtaining a DUNS Number is typically free for U.S. businesses, though expedited services may incur a cost.
• While no longer required for U.S. federal contracts since April 2022, it remains a critical identifier for many private sector and international transactions.
• The DUNS Number is tied to a company's D&B business credit file, including its payment history.

Interpreting the DUNS Number

A DUNS Number itself is not a credit score or a measure of financial health. Rather, it serves as a pointer to a business's credit file maintained by Dun & Bradstreet. When a business or lender receives a DUNS Number, they can use it to access a company's detailed credit report from D&B. This report typically includes information on the company's organizational structure, operational data, and financial performance, including its financial stability and payment behavior. By examining the associated credit report, an entity can gain insights into a company's creditworthiness, helping in processes like due diligence and risk assessment. Organizations often look at scores like the D&B PAYDEX Score, which reflects a company's payment performance, alongside the DUNS Number. Dun & Bradstreet provides detailed information on how these scores are calculated and interpreted on its PAYDEX Score page.

Hypothetical Example

Consider a hypothetical manufacturing company, "Widgets Inc.," that wants to secure trade credit from a new raw material supplier. The supplier, before extending credit, requests Widgets Inc.'s DUNS Number. Widgets Inc. provides its nine-digit DUNS Number, say "87-654-3210."

The supplier then uses this DUNS Number to pull a business credit report from Dun & Bradstreet. The report reveals Widgets Inc.'s operational history, legal corporate structure, and crucially, its payment history with other vendors. If the report shows a strong track record of on-time payments and a favorable D&B PAYDEX score, the supplier is more likely to approve the trade credit with favorable terms, confident in Widgets Inc.'s ability to meet its financial obligations.

Practical Applications

The DUNS Number has several practical applications across various business and financial activities:

• Business Credit Assessment: Lenders, suppliers, and business partners often request a DUNS Number to quickly access a company's credit report from Dun & Bradstreet. This aids in evaluating creditworthiness for small business loans, lines of credit, or extending payment terms.
• Government and International Contracts: Although the U.S. federal government has transitioned to the UEI, the DUNS Number remains a requirement for doing business with certain international organizations and governments. It also continues to be a standard in many private sector supply chain interactions.
• Vendor and Partner Vetting: Companies use DUNS Numbers to vet potential vendors, distributors, or partners, helping to assess their stability and reliability before entering into agreements.
• Regulatory Compliance: Some industries or regulatory bodies may require businesses to have a DUNS Number for identification and data reporting purposes. For instance, the Apple Developer Program requires a DUNS Number for enrollment to verify the legal entity of developers. Details on this requirement are available on the Apple Developer Support website.

Limitations and Criticisms

While the DUNS Number serves as a widely recognized business identifier, it does have certain limitations and has faced criticisms. One primary point is its proprietary nature; it is controlled and managed by a single private entity, Dun & Bradstreet. This can lead to concerns about data control and potential costs associated with accessing detailed reports, even though obtaining the basic DUNS Number for U.S. companies is free.

Another limitation is that the DUNS Number is not a direct indicator of a company's current financial risk without accessing the full credit report. While it points to the credit file, it does not, on its own, convey financial health or payment behavior. Businesses sometimes complain about the process of updating information within the D&B system, which can impact the accuracy of their associated credit file if not diligently managed. Furthermore, the U.S. federal government's move away from the DUNS Number to the Unique Entity Identifier highlights a broader shift towards non-proprietary identification systems for official purposes.

Data Universal Numbering System (DUNS) Number vs. Employer Identification Number (EIN)

The Data Universal Numbering System (DUNS) Number and the Employer Identification Number (EIN) are both nine-digit identifiers for businesses, leading to common confusion, but they serve distinct purposes and are issued by different entities.

The DUNS Number focuses on establishing a company's identity within the business credit ecosystem, while the EIN is a taxpayer identification number used by the U.S. federal government for tax administration.

FAQs

How does a business obtain a DUNS Number?

Businesses can typically apply for a DUNS Number for free directly through the Dun & Bradstreet website. The application process usually requires providing basic company information such as the legal business name, address, and contact details. Dun & Bradstreet will then verify the information and assign a unique number.

Is a DUNS Number mandatory for all businesses?

No, a DUNS Number is not mandatory for all businesses. Its requirement often depends on the specific industry, business partnerships, or objectives. While it was previously required for U.S. federal government contracts and federal grants, this is no longer the case. However, many private companies, lenders, and international organizations still require it for business credit assessment and vendor relationships.

Does a DUNS Number expire?

No, a DUNS Number typically does not expire. Once assigned, it remains with the business throughout its lifecycle, even through changes in name, address, or corporate structure. Dun & Bradstreet periodically updates the associated business information to maintain accuracy.¹

What information is associated with a DUNS Number?

A DUNS Number is linked to a comprehensive business profile maintained by Dun & Bradstreet. This profile includes various data points such as the official business name, address, telephone number, number of employees, industry codes, and most importantly, the company's financial data and payment history. This information is used to generate business credit scores and ratings.