Understanding Your New Clients

We’ve all experienced that rush of excitement when securing a new client. The promise of new business is invigorating—after all, it’s the lifeblood of sales! But before you dive in, ask yourself: How well do you really know your clients? Have you gathered the crucial information needed to foster a successful, long-term relationship?

Collecting this information can be tricky. You want to avoid awkward conversations that could put off your new client. For instance, it’s not exactly easy to ask, “Are you a late payer?” That’s a sure way to jeopardise the relationship before it even starts.

A New Customer Onboarding Form

A simple and effective way to mitigate this risk is by implementing a “new customer onboarding form” before you begin fulfilling orders or providing services. This form allows you to gather essential details that will help you assess the potential risks to your business. It’s an easy step that can save you significant time and effort in the future, especially if payment issues arise.

Key Information to Include

Here’s what you should consider including in your onboarding form:

1. Trading Name

• Distinguish between the registered name of the business and the trading name (if one exists for marketing purposes). For sole traders, ensure that your documents state the customer’s name followed by “trading as” their business name.

2. Registered Business Name

• This is the official name of the company, such as “ABC Limited.” It should be used in all formal communications. If you ever need to pursue an outstanding debt, having the correct registered name is vital. Verify this information on Companies House, where you can also find the company’s registration number and address. Be precise: list the company name on your documents exactly as it appears in the Companies House records.

3. Type of Business

• Identify whether the business is a sole trader, partnership, or limited company. This knowledge helps clarify the responsibilities of both the company and its directors. Also, be sure to gather contact information for the directors and the department that handles invoice payments.

4. VAT Details/Number

• Requesting the VAT number is another way to verify that the business you’re engaging with is legitimate.

5. Decision Maker(s)

• The person who places the order may not be the same individual responsible for paying the invoice. By separating this information on your form, you can gain a clearer understanding of your client’s internal processes.

6. Terms & Conditions

• Include your terms and conditions in the form, detailing your credit period, payment policies, and the right to charge interest on overdue invoices. Ensure your new client reads, understands, and agrees to these terms.

Building a Strong Foundation for Future Success

By starting with transparency and clear expectations, you lay the groundwork for a strong, positive working relationship. If a client hesitates to provide the necessary information, it might raise concerns about their reliability—what might they be trying to hide?

While you might feel uneasy about asking these questions, remember: a formal onboarding process not only protects your business but also enhances your professional image. Embrace this process as a way to ensure that both parties are set up for a successful and mutually beneficial relationship.

Ready to strengthen your client relationships? Start with the right questions.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 13/09/24