There will always be some customers who are slow pay or no pay. Don’t just sit back and wait. The longer you wait the greater the likelihood of not collecting!
The better you know your customers, the easier it is to collect. The best time to get the information is in the beginning of your relationship. One way to assure you have a complete file is to make the sales staff’s commissions and bonuses contingent on getting all the information and the contracts signed. If the business is a closely held corporation or limited liability company, get the personal guarantee of the owners.
- Business Facts – Frequently the exact business name, type of organization ( Limited Liability Company, Corporation, Partnership,) Tax ID Number, names and address of officers, and shareholders of a closely help business are not even in the file.
- Customer Contacts and Bill Payers – You should have a list of the key players and the person that actually cuts the check.
- Have the Payment Facts – Know how much is owed and the payment history of each client.
- Risk of the Customer Defaulting – What is the credit worthiness of the customer? Did you run a credit check?