8 essential questions to ask your customers
Given the risks that late payments can pose to any business in an economically unstable environment, now is a great time to try and check your processes and ensure you’re doing all you can to reduce the risks.
One thing that should be on your list to review is the information you collect from customers from day one. Gathering the necessary business information about your customers before trading with them is essential, and if anything does go wrong you could be relying on the accuracy of this information to recover any debts.
But what exactly do you need to know? Well, here are 8 important questions you should ask every customer and why you need to know them:
1. What is the business trading name?
Many businesses operate under a trading name for marketing purposes. It’s important not to get this confused with their registered name.
2. What is the full registered business name? (If different from above)
This is the business’s official name which they should use in all formal correspondence, paperwork and Companies House and HMRC submissions. This information is vital in the event the customer fails to pay and you need to take action either through a debt collection agency or the courts.
3. Is the business a sole trader, partnership or limited company?
It’s really important to know the legal status of the business as this determines what legal and personal responsibilities the company has.
4. What is the company registration number and address?
The company registration number and address will help to identify the business you are trading with in the event you need to trace them or pursue legal action in the event they fail to pay on time.
5. What is the business VAT number?
Checking to see if your customers VAT number is genuine allows you to verify that the business you think you are trading with is actually who they say they are.
6. Who placed the order?
Be sure to get the name, address, email and a contact number for the person placing the order so that you can contact them easily if required.
7. Who should the invoice be addressed to?
It’s also important to get the required contact details for the most relevant person to send the invoice to. Make sure you have an email as well as postal address for the contact as this is a more efficient way to send invoices. And remember, getting these details wrong could cause delays in payment, so make sure you check them.
8. Who is responsible for accounts payable? (If different from above)
Especially in larger businesses, often the person you deal with won’t be the person in charge of paying you. So make sure you have the appropriate details for accounts payable so you can contact them directly if any issues in payment arise.
The great thing is that getting the answers to these questions can easily be achieved through an account opening form, sent to the customer as soon as the order is placed. This should also detail your business’s terms and conditions of trade. It’s quite commonplace for this nowadays and demonstrates you’re an organised and professional company.
In the event your customer fails to pay, this information will prove vital should you need to instruct a debt collection agency or go through the legal process to recover your money.
These details can also be used to get a credit report to discover the risk the customer will pose to your business. Should their credit score be low, you can therefore demand full or partial payment up front, decline their order, or at the very least take extra caution when performing credit control.
You might be thinking this is a lot more information to gather, which may prolong the time it takes to start providing the service. But reviewing your processes can make this step simple and streamlined, and will definitely be worth it down the line.
If you are struggling with a late payment from a customer and don’t feel that you have the time or expertise to recover it, we can help. Get in touch on 0800 9774848 or request a call back.