How to minimize the risk of contracting with bad payers

To minimize the risk of contracting with bad payers is something that each business owner will want to figure out how to do. Prevention is always better than cure! So take a look at your processes and fix those before attempting to cure an already existing problem.

 

1. Homework, checks, balances, google, phone

Most sales representatives are probably out in the field the entire day attempting to list new clients and spend very little time at the office doing the groundwork for these meetings. These employees need to be specially trained in order to best protect your company.

One of the most basic manners of ensuring that you do not contract with a bad payer, is doing a routine credit bureau check. This check will tell you immediately whether the company you are selling your product to is actually trading. This may seem trivial, but many companies are trading while they have been deregistered at the CIPC and are not allowed to trade and cannot be sued.

 

2. The Golden Rule – VETTING

Your vetting process should take place once your sales representative has received the requisite paperwork from the potential client, but before he or she signs it on behalf of your company. The vetting process should be extremely thorough and should be able to tell you whether you have a good or bad client in the pipeline.

As you have already established that your potential client is trading, in step one, you can now explore in-depth by establishing your client’s payment history by means of a credit bureau search.

However, consent should be obtained to do these checks. Make sure that an attorney has drafted your standard agreement and that this agreement makes provision for credit checks to be done.

Reading reviews on your potential client is also very handy during the vetting process.

 

3. Service & initiatives

Who is selling your product? Exceptional care should be taken when employing sales representatives. Absolute honesty and sound character is paramount.

Not only is your sales representative in a position to cost you money if things are not done 100% correctly, but they are in a position to defraud the company and eventually cost the company both revenue and severely harm its reputation.

When your sales representative’s only incentive is commission due to a small salary, you are opening your company up to possible fraud. It may be wise to rather offer a slightly higher salary and lower commission percentage to ensure that your sales representative’s bread and butter is not dependent on commissions.

 

4.List bad payers on the Credit Bureaus

If a client is a bad payer, but not in a position where the company faces possible closure, a very handy tool is to list their payment habits on the credit bureaus. Again, make sure that your agreement is drafted well and makes provision for listing of bad payers.

Furthermore, take added care in training the staff members responsible for the actual listing to ensure that all requirements are met and adhered to. Non-compliance with the relevant laws in this regard will harm your company far more than the harm done to your bad paying clients.

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Cindy-lee Payne
Cindy-lee Payne
2018-10-15T10:50:14+0000
would like to thank Kaylee and Cathleen for an awesome service. friendly and very professional. would definitely recommend their serviceread more
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Chandre Greeff
2018-01-22T17:54:57+0000
Geraldine Bruce
Geraldine Bruce
2018-01-21T14:46:21+0000
Mervyn recently assisted me in a case against one of the largest financial institutions. I had really run out of options and Mervyn's knowledge and expertise convinced me right away that he was the one I wanted on my side. Mervyn and his team worked tirelessly and professionally to conclude the matter and I am extremely grateful my 3 year nightmare is finally over. I would definitely recommend Vermeulen Attorneys.read more
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2018-01-14T10:09:01+0000
I am very impressed with Mervyn's professionalism, and willingness to go the extra mile. Vermeulen Attorneys have really outdone themselves in assisting me in a very trying time.read more
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Cathy Foster
2017-05-18T11:06:03+0000
I have been using Vermeulen attorneys for more than 3 years in my business. I have had nothing but excellent service and regular feedback on all my cases. I highly recommend them.read more
Liyana Van Heerden
Liyana Van Heerden
2017-04-05T12:58:04+0000
Excellent feedback and Results. Vermeulen Attorneys handle all our outstanding accounts and have always proven themselves worthy of settling payment in the shortest of time frames. Their rates is affordable from small to big operating companies. The give excellent feedback so you always know where your case is standing. Glad we started working with them as they are saving us a lot of trouble and money.read more
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Rina Snyders
2016-09-14T07:57:34+0000
WOW! Vermeulen Attorneys is nothing short of AMAZING. They handled my case so professionally and made sure justice was served. I am so grateful to have a lawyer like Mervyn represent me. Thank you. Your work is exceptional.read more
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Daniela Pucci
2016-08-02T14:22:30+0000
Cannot thank Vermeulen Attorneys enough for the wonderful services delivered from start to end. Due to your attentive & professional advice received on the matter, this created a preferred environment for ones difficulties in any situation. Thank you! this ensured a we underwent kept every attribute to the situation.read more
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Pieter Van Rooyen
2014-02-09T17:09:33+0000
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Lorraine Sigasa
2014-02-04T23:49:12+0000
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Bianca van Heerden
2014-02-04T11:36:33+0000
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