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Service: Credit Control
Date: 23/04//2013
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ICSMís guide to assessing new customers

When you receive an enquiry from a new customer the onus is on you to check out their credentials to ensure they are who they say they are.


Don’t and you risk not getting paid.

Fortunately thanks to the internet and the greater sharing of information, checking up, or should we say checking out, any operation behind a first time order has never been easier.

Step one, check that the name of the business, address and contact details tally with their web page or any online listings.  Also check with the government agency Companies House as it registers all UK limited companies (http://www.companieshouse.gov.uk/).


Often questions are raised when these checks uncover the fact the business’s trading name is different to the registered name. This is perfectly legal and is no reason for concern. A business name can be used by any person, partnership or company for an operation which is not the same as their own name. A company must however, disclose its registered name in business correspondence and documentation such as letters, notices and other official publications, cheques and orders for money, goods or services signed by or on behalf of the company. Also when contracting, in applications for licences and on its websites.


It is worth noting that the any contract containing the business name only is legally enforceable but only as long as the use of the business name did not create any confusion as to the identity of the party in question, and the contract did include all other elements required. In the event of any dispute over the identification of those in the contract, the courts will review and interpret what was said and done prior to the formation of the contract.


If you are still unsure about your potential client then look at how the operation presents itself virtually (is the website kept up to date, does it readily appear in searches?) and physically (does its address and look of the premises match expectations?). If the answers are no then alarm bells should be ringing.


Of course every business is looking to start relationships with new customers and should welcome any opportunity that arises. Most of the time this will lead to a mutually beneficial agreement that supports your long-term operational health. However, it only takes a couple of disreputable operations to strangle cashflow and, ultimately, the life out of the company you have strived so hard to build.


If in taking these simple steps to understand your new customer you have found anything that raises questions, talk to us. We have a network of members throughout the industry who share valuable details regarding their trading experience.


Then, of course, there is our own portfolio of credit checking services that offer another level of security and peace of mind.


For more information or if you have any questions please contact us on:


0844 854 1850


Tel 0844 854 1850 ___ Fax 01454 318 517 ___ Address ICSM, 51 Broad Street, Chipping Sodbury, Bristol, BS37 6AD
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