Good Business Tips: Know Your Customer

Running a business can be trying. Oftentimes it is necessary to call upon a debt collection agency for help collecting money that is owed. However, if companies take a stance of prevention, they may not need to use the assistance of a third party collections agency. Knowing the client or customer can be extremely useful for filtering out potential problems.

First, a business should determine the full legal name of the customer that it plans to do business with. Find out the type of business structure. Is it a corporation or a partnership? The names, addresses and titles of the principal members should be collected.

It is important to know the federal employer tax identification number. The telephone number, ship to address, name, fax number and email address of the main contact should be known as well. Additionally, the bill to address, fax number and telephone number of the accounts payable contact is a good piece of information to know. Individuals authorized to submit orders should be listed.

Ask about bank references. Find out what the bank’s name is. The branch address, fax and telephone numbers, account types, account numbers and dates opened can be useful information. The name of the bank representative should be also be collected.

Finally, the terms and conditions of sale must be accepted and acknowledged by the client’s signature. The client’s signature, printed name, date of signing and title should be collected, and it is crucial to have the company’s lawyer look over any documents before use.

Find out the client’s credit history and keep great communication via personal visits or phone calls. Have a timely delivery of goods and services, and up to date records and accounts receivable information. Send memos and letters out to remind the client about the money owed and keep them up to date.

Join an industry credit group and participate actively. It is crucial to know the laws in the state that the company is in regarding collections and business proposals. To protect the company, it is crucial to collect references. Bank references, including the bank name, branch, account type, account number and trade references are important to know. Collect three trade references at least that include the name, address, telephone number and email addresses.