Why you should know your customer when it comes to making a Sale of Goods/Services
When making a sale to deliver Goods/Services for a new customer, it can be hard to tell whether they are good or bay payers and may be unable/unwilling to pay your invoices. When it comes to business debt recovery, it is crucial that that you takes steps that help you to protect your valuable cash flow.
Everybody sells with the expectation of being paid, but simple analysis will certainly help you, and us to recover your debts.
Do you know who you have traded with? Whilst this may seem like a simple question, it is extremely important that we are pursuing the correct legal entity from the outset. Your customer could be a Private Limited Company (LTD), Public Limited Company (PLC), Limited Liability Partnership (LLP), Sole Trader or Partnership. Some unscrupulous customer deliberately give a false name so your issued invoice will be incorrect.
Be wary about customers putting pressure on you to provide the goods or services as soon as possible. We always say that if you give credit have a credit application form that agrees to your terms and conditions, a set of which is crucial to have in place. Be very wary about those companies that insist that you must accept their terms and conditions and when you query onerous or poorly drafted clauses they respond that they are standard. No such thing a standard. Our considered response is what precedent are you quoting?
If you are sent a contract then go on the internet and seek the price of contract checking from someone like CW Contract Law and Legal. If the company is Ltd then do simple free check at Companies House to see if they have filed accounts and perhaps even checking the credit history of the directors. It takes minutes. If the company has no field accounts make sure there is a clause in your Ts & Cs that makes directors liable.
Once you have obtained this information, you have a more informed choice about what credit you will offer. Complete credit checks are expensive. Remember, not making or turning down a sale rather than being a busy fool in working and not getting paid is better. ?
领英推荐
Go with your gut. Ask yourself why this person approached you and why they left their previous supplier because the first rule of selling is everybody is already buying from someone else before they came to you.
Get the basics right such as ensuring you know their trading address as well as any registered address.
In addition have a process in place for collecting monies and never be frightened to ask for monies under the payment terms the customer has agreed to. If your process does not work within 1 month you may be advised calling in a professional such as AVC Debt Recovery as we are specialists in Business Debt recover and Commercial Debt Recovery and offer no win no fee as standard. If the debtor says they will pay you when they get paid then engage a professional the same day
We analyse all debts free of charge and offer no win no fee as standard with no hidden charges or extras.