When you are taking on new customers are you setting the standard, and do they know your rules and how you intend to provide your goods and or services?
A lot of businesses do not actually know who they dealing with, or even if they have the ability to pay you. The responsibility of risk assessment and due diligence can often fall solely onto the business owner or not at all.
Due diligence is what the lawyers use to say, ‘have you done what you should be doing to avoid breaking the law’. Risk assessment is when you are conducting checks and assessing your customer to get to know your customer and get an idea of their financial position. These two work hand in hand in protecting your business.
At BCA Debt the onboarding process consists of a simple audit to ensure that we can actually help the customer and we won’t just be taking their money. After an audit, we make the decision to take on the customer, or not, and if the customer makes the decision to use our services, the customer must complete our registration form and agree to our terms of trade. This lays down the ground rules for our clients, from day one we are ensuring that everyone is on the same page and understands one another's role in us providing the services. Our due diligence and risk assessment rely on our policies and procedures.
When a customer is not onboarded properly it has the potential to create issues and disputes between parties, sometimes those issues won't happen until further down the track. Having iron-clad policies and procedures in place for onboarding is what is going to avoid these issues.
Furthermore if you are providing services and or goods on a credit basis, who are you providing credit to? Carrying out risk assessment measures in regards to supplying credit is crucial to protecting your cash flow. A risk assessment will include things like checking that your customers are who they say they are, and they have the ability to pay. There are a few hoops to jump through before you can conduct thorough credit checks on companies and their directors, doing these checks without the proper provisions in place may incur hefty fines if you are found to be in breach of the privacy act.
Don’t let people slip through the cracks in your business, using policies and procedures to uphold your business is key to protecting it. When you have clear terms of trade, and include a credit application when necessary you are not only laying down the ground rules you are showing your customers that you take your credit supply seriously and you are operating your business at a gold standard.