Good Business Practice: Get To Know Your Customer

Running a business can be difficult

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

First, a business should ask for the full legal name of the company that it plans to do business with. Get to know the business structure. Is it a corporation or a partnership? The names, addresses and titles of the principal members should be collected.

It is key to find out the federal employer tax identification number. The telephone number, ship to address, name, fax number and email address of the main contact should be established as well. Also, the bill to address, fax number and telephone number of the accounts payable contact is a useful piece of information to know. Individuals authorized to submit orders should be listed.

Bank references should be inquired about. What is the banks name? 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 collected as well.

Finally, the terms and conditions of sale should be acknowledged and accepted by the client's signature. The customer's signature, printed name, date of signing and title should be collected, and always have the company's lawyer look over any documents before use.

Be aware of the customer's credit history and keep good communication through phone calls or personal visits. Keep a timely delivery of services and goods, and current records and accounts receivable information. Send out memos and letters to remind the client about the money owed and keep them up to date.

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

by: Mallory Megan

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