How to Set up a Business Payments Toolkit Before You Launch

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When you first set up a new business, you need to put many different processes and procedures in place. The more attention you give to this at the early stages, the better off you will be when your business is ticking over, so you can always fall back on some of these processes when things go wrong. In particular, you need to focus on how you receive your money and what you need to do in the event of a problem. So what are some of the key procedures that you need to initiate from day one?

Safety First

If your business supplies goods or services at a relatively high "ticket" price, it may be tempting to take on customers in the early days as they materialise. Yet, you should always conduct some form of check before you extend any credit, just in case the organisation may present a problem in the future.

Extending Credit

To be as safe as possible, conduct a credit check using one of the recognised agencies. You'll be able to get a picture of their previous performance to avoid the risk that they may default or, worse still, fall into insolvency. You should conduct this check periodically as your relationship matures.

Full Contact Details

Gather as much information as you can from your prospective new customer before you agree to do business. Find out exactly who is responsible for paying and their accurate and detailed contact information. At the least, you should have their direct email address and telephone number.

Clear Terms and Conditions

Get help from a solicitor before you draw up your terms and conditions. Within the documentation, be very clear about your conditions related to late or non-payment. The terminology should be fair but strict and should clearly stipulate what will happen in the event of a dispute.

Then, always stick to those terms and conditions when you are underway. Have somebody reach out immediately once an invoice is overdue for payment and follow-up according to a tight schedule, should payment not be forthcoming.

Debt Collection Agency

You should always engage the services of a debt collection agency on standby. You hope that you will not need to use them, but don't be afraid to turn over the case to these experts when it is clear that you are not making headway otherwise. Certainly, you shouldn't rush to implement these debt collection measures but remember that the older an unpaid invoice gets, the higher the likelihood is that you will not receive payment at all. Agencies have a lot of experience and can often make more progress than you would, so this level of specialist support should be part of your business set-up toolkit.

For more information, contact a debt collection agency near you.

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