Debt Recovery Series – 1. Knowing Your Customer
With the recent demise of Monarch, there will be a number of creditors who...Back to News and Events
With the recent demise of Monarch, there will be a number of creditors who will be left out of pocket. A number of them will probably try to recoup some of the losses that have suffered. Gathering as much information as possible about a new customer is of paramount importance. Ultimately this can made debt recovery a lot easier further down the line.
When entering into a new business relationship, gathering information now can save you a lot of heartache later. If the relationship starts to sour, information that you are able to glean at the beginning is likely to help greatly in making sure that you recover monies that are due to you.
When you are just starting out your relationship, it is the obvious time to ask lots of questions. You want to get to know the other party in any event to ensure that your working relationship grows in the right direction. This will also assist you in finding out key pieces of information including whether the business trades in a limited company vehicle or a partnership or whether the individual you are talking to is, in fact, a sole trader. Does the individual you are talking to actually have authority from the directors to enter into the agreement with you?
Gather as much information as you can as, at this stage, they will likely be prepared to provide it. When relationships start to sour, they may be less willing to provide you with some of the information you want. This includes details such as bank details and personal addresses of the directors.
It is important that any information that you obtain during the initial stages is retained in a centralised place. You will undoubtedly need to refer back to this information at some point. You need need to make sure that you can find it. It may be helpful to create an internal data capture form so that all the information is in one place. This ensures that everyone across your business is gathering the information you need from your suppliers. Sit down and think about what information it is that you are likely to need going forwards. This may be to further assist the client in your business or to ensure that you are protected as best as you can be should you need to take legal action further down the line.
Circumstances change and ensuring information is kept up to date is important. You may therefore want to factor into your relationship an annual review of this information. Have they changed bank details? Has the business grown and the partnership incorporated the business into a limited company vehicle?
Whilst I have mentioned paperwork above, the point here is to make sure that your house is in order when it comes to contractual paperwork and invoices. Has the customer signed all of the necessary paperwork? Do you have copies on your file? From a lawyer’s point of view, it is much easier to assist if most of the terms and conditions are available in black and white and signed by both parties and any unpaid invoices are made out to the right person. As such, think about what information you would need to include within the contract and documents produced during your relationship to ensure that you are protected.
It may seem a little overkill to gather this much information, or it may seem simply common sense to you. Either way, you will be happy of putting in place a robust process should things ever go wrong.
For more information, or for an appointment to discuss your Debt Recovery requirements, speak to one of our expert solicitors in our Civil Litigation team on 01270 762325. Alternatively you can visit our Civil Litigation services page here or complete the form linked here and we will call you back. To see the next article in our mini series, please click here.