Expert view: ‘Know your customer’ to avoid business losses
A debt recovery expert is warning businesses to get to know customers well before doing business with them.
Suzanne Dean, debt recovery manager at Napthens solicitors, reports she has advised a number of clients who have supplied goods or services to customers that fail to pay.
When they attempt to bring a claim to recover the debt, they are often unsure who their customer is and haven’t checked their credit levels.
Suzanne also warns that if proper credit checks have not been carried out, then even if a court orders a customer to pay, they may be unable to do so.
She gave her top tips for getting to know a customer:
Make sure you know who you are dealing with – you must know who runs the business to identify who is liable for debts.
- Do your research – obtain impartial references.
- Prevention is better than cure – don’t be afraid to question your customer.
- Check credit status – to flag up potential problem customers and avoid non-payers.
- Be consistent – introduce a policy and ensure all staff follow the rules.
Suzanne said: “It is easy to avoid potential losses to your business by ensuring you know your customer before doing business with them. “A simple rule to remember is that a sale is not a sale until the invoice has been paid, so ‘know your customer’ policies are becoming increasingly important to prevent identity theft, financial fraud and money laundering.”