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Debt Recovery Masterclass: Knowing Your Customer

16 September 2020 Written by Stephen Cowan Category: Blog

When raising invoices to obtain payment from your clients or customers, it is vital that you know exactly who you are billing, where they are based and how they pay. In our latest Debt Recovery Masterclass, Stephen Cowan looks at the importance of knowing your customer:

1. Check out the exact name and legal status of the business you're supplying.

If it's a sole trader or partnership, the propriertor or partners are personally liable so make sure you have their full details.

For limited companies, you can obtain information and documents here.

 

2. Check if the business is a signatory to the Prompt Payment Code.

If so, they have committed to the Code principles and, if they don't pay promptly, you can raise a challenge and the Chartered Institute of Credit Management will intervene on your behalf.

Their Prompt Payment Code entry may also give information about how they pay and what you need to do to ensure you are paid promptly.

If it's a large company (as defined by the Companies Act), it has to report its payment performance on the government's 'Business Payment Practices and Performance' webpage.

 

3. Don't be afraid to push for all the information you need.

If you cannot get it now, it will be far more difficult later.

 

4. Watch out for cultivated 'friendly' references that the potential customer gives you.

Referees that you choose are far more effective.

 

5. Invest in credit reference information.

It could save you a bad debt!

 

6. Set some rules that you (and all of your employees) always follow – and don't be tempted to break them, even if you are put under pressure to supply urgently.

 

How can we help?

If you need help recovering your debt, please get in touch.

 

This video was reproduced with thanks to the Institute for Credit Management.

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