Know your Customer

It's amazing how often goods or services are provided to a customer on credit without having full address or company details. Knowing the exact trading name can be vital in pursing a customer for payment through the legal system, should the need arise. The customer's headed stationery, business cards or brochures can often be helpful in determining the exact name, although remember they can be incorrect. Before you grant credit to any customer you should confirm the following details :

• Full name of the business, and whether the business trades under a different name.
• Type of business, e.g. Limited company, sole trader, partnership?
• Registration number if it is a limited company.
• Check online at companies house to ensure you have accurate details for a Limited company and to ensure they are still trading.
• Who the contact is for payment queries - including address details, telephone and fax numbers and email address.
• Where to send invoices, as this is often different from the delivery address.
• Ensure that paperwork is signed by an authorised individual from the company and beware of individuals placing orders from personal email accounts (e.g. hotmail).
• Don't accept orders from people ordering 'on behalf of' an end client, for example an agent, designer etc. Ensure that the end-customer has authorised the order.
• Once you have this information you're ready to credit-check your customer to set credit limits.
• TAK recommends Credit Guardian as the most effective way to check credit worthiness ? get your free credit rating reports here