Questions You Should Be Asking Every Customer

When you first sign up a new customer, there’s a lot to do, most of which is about getting their account set up and open, ready to take their order. For some businesses, this is a simple process and for others, it’s a big ordeal. But if your business offers credit to customers in any way, then you need to do a little bit more due diligence. For many, this means having a set ‘accounts opening’ questionnaire, which will give you all the information you could need on your customer now, and in the future. But what information do you need, and how do you ask for it? To help you out we have 8 questions that you should be asking every customer when they sign up.

What Is The Business’s Trading Name?

Many businesses operate under a trading name. This means they will be known in the market and by their customers as one thing, but as another when it comes to legal documentation. So it’s important for you to know if the company name you’re used to is a trading name of their registered name. If you get this wrong and use a registered name for agreements and invoices, this could get you in trouble later down the line if you need to pursue legal action and potentially even lose you money.

What’s The Legal Registered Name?

This is the legal, official name for the business entity you’re dealing with. It’s the name they use in formal correspondence, on official paperwork and in any submissions to HMRC and companies house.  This is not only important for any potential future legal action, but also for running credit checks on the company before you agree to work with them. This saves all sorts of hassle later on! If you think you don’t need to gather this information because you’re not running credit checks, think again, and start running them.

What Structure Does The Business Have?

Is this client a sole trader, or a limited company? Are they an LLP, or a registered charity? Knowing the legal status of your clients is important because it helps you understand what responsibilities the directors have, and how much they need to be involved in difficult discussions in the future. If the business is a sole trader, it can be useful for you to ask for the director’s contact information – including email address, phone number and address.

What’s The Company Registration Number And Address?

Having the correct company registration number and address is an important step in identifying the business that you’re trading with. It helps you search for their details on companies house and verify that they are a legitimate company, run credit checks and allows you to take action effectively if they fail to pay on time. It also allows you to trace the company and the directors in the event you can’t reach them.

What Is The VAT Number?

Having a customer’s VAT number on file serves 2 purposes. First it allows you to charge and claim VAT appropriately. Secondly, you can check the validity of a VAT number to ensure the business you’re trading with are genuine and are who they say they are.

Who Placed The Order?

There are often many people within a business, and knowing who places the orders is an important step in managing your ordering and invoicing process. Make sure you capture a name, address, email address and phone number for the person or persons who submit the orders so that you can contact them easily if required. This is especially useful if your customer needs Purchase Order Numbers, which often require invoices to be signed off for payment. This question helps you understand the process your customer will go through with purchases, and make sure you do everything in your power to avoid delays.

Who Are Invoices Addressed To?

One of the biggest causes of payment delays is invoices addressed to the wrong people or department. Remember that the person placing the order might not be the one the invoice should be addressed to, and getting the name on the invoice wrong can significantly delay an invoice being paid. So make sure you get that information right and ask to be notified if that person changes.

Who’s Responsible For Accounts Payable?

Finally, get the information of the person who is responsible for accounts payable within the business. Often, especially in bigger businesses, this won’t be the person you’re dealing with the rest of the time, so it’s important to know who to go to if there are any problems. Get their name, email and phone number so that you have someone to contact if any issues in payment arise.

We know it seems like a lot, but these questions could save you a lot of time, stress and money in the long run. Using the information gathered from these questions, you can run a credit check on the client to ensure they’re capable of paying and manage the relationship between yourself and the client moving forward. Should you need to take legal action, you already have the essential information ready to speed up the process. It’s a risk mitigation exercise, and one you’ll be very glad of should any issues arise! At Debtcol, we can help you put together account opening forms to make this process as streamlined as possible, so that you can move forward with peace of mind. To find out more, just get in touch with the team today.