How well do you know your customers?

Often businesses do not find out that their customers are having financial difficulties until an invoice is unpaid.  So why not put a stop to the practice of just taking on any customer?    Do some due diligence at the beginning of your business relationships.   Make getting to know your customers part of your business process.  

If your business relationship has already begun with a customer, there is nothing to stop you from starting to get to know your customer sooner rather than later! 

Here are some tips to help you:-

Tip 1

Speak to your customer.  Ask them how their business is going. Show an interest in what they are doing.   Is your customer doing well or are they taking risks and struggling?

Tip 2

Who have you been contacted by?  Can that person make decisions on behalf of the business?

If the person that you are speaking to is not a decision making, the business may refuse to pay you or make it difficult for you to get paid.

Tip 2

What type of business is your customer? A sole trader, a charity, a limited company?

If a limited company check Companies House and have a good look ground.

Has your customer filed its accounts on time? Are there any red flags in relation to your customers solvency?

Tip 4

Consider getting a credit report. It will provide a credit score for your customer, but remember that the information will be taken from the business’ prior financial history/accounts.

Tip 5

If you are concerned about your customers finances, considered ordering an advanced reports that can also predict the solvency of a business 12 months in advance.

At Johnson May solicitors, we offer low fixed fees to help our clients with debt recovery.  We are based in Beckenham and London City but we service clients throughout England.

If you’d like a no-obligation chat, contact us.

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