Gathering Customer Information

Protect your Cash Flow with Customer Information

If you Google ‘what customer information to collect,’ I can guarantee most of the answers will be from a marketing or customer journey perspective., i.e., net promotor score, demographic data, engagement etc.

But you need information about your prospects or customers for other reasons too.

  1. To decide if you want to and if it’s safe to do business with them
  2. To provide your Goods or Services
  3. To get paid, or act if you don’t get paid

Or, to put it another way, to ensure you have the information you need to make effective decisions, are working with the right businesses in the best way, and understand your customers and prospects better.

So, what information do you need?

Deciding who to work with and under what terms

When you receive an enquiry from a prospective new customer, it’s tempting to put all your effort into closing the sale. Any research you do is likely to learn more about the business or person who has contacted you so you can prepare for a sales meeting.

But, to use an old axion, a sale is not a sale until it’s paid for. Therefore, it’s crucial to establish if a prospect is willing and able to pay for the goods or services they want to buy from you.

To do that, you need some critical pieces of information BEFORE you decide to go ahead:

  • Business or trading name and full legal name if different
  • Trading and Registered office addresses (if different)
  • Company Registration Number, if applicable
  • Full names of Directors with significant control
  • Proprietor or Partners names, if not an incorporated business

All this information will enable you to undertake a creditworthiness assessment and verify the prospective customer’s situation. You can decide based on that assessment about the terms you want to trade with them under that best protect your business from the risk of late or non-payment.

A word of caution, though. A company search may find an exact match, but that could be dormant and set up for name protection purposes only. The actual trading entity could be a sole trader or partnership, which makes a big difference, so ask the question.

To provide good or services

This one is probably the most obvious; after all, you need to know where you will be providing the goods or services, and you’ll need the contact information (email address, direct line, mobile number etc.) of the person placing the order.

Something else to establish early on is if Purchase Order numbers are required. Nothing is worse than chasing for payment only to be told that no PO, no payment.

If PO numbers are essential for getting paid, you need to decide if you will accept an order without one. Sometimes a buyer will promise a PO to follow, but once the order has been received, they will have little incentive to follow up on that promise.

To get paid

It should be simple, right?

You send the invoice to your buyer, and X days later, you get paid on the due date.

Sadly not, especially when dealing with slightly bigger businesses that don’t do their banking on an app on their mobile phone!

So what do you need to know to get paid on time?

  • Is there a separate Accounts Payable / Finance team?
  • The contact details for the person who makes the payments so you can send the invoices directly to them.
  • What days do they work? Remember, not everyone is full-time, and you need to know the best time to call them or when you can expect an answer to your emails.
  • Do they make payments every day or at specific times in the month (e.g., Fridays, 15th & 30TH, month end only etc.)? This information could determine when you issue invoices, so you get paid within your terms.
  • What is the process that an invoice must go through to get paid? Do you need to upload to a portal? Who needs to approve it?
  • What information might they need on an invoice to go through the process smoothly? Such as the name your bank account is in if it’s different to your trading name or the PO number. Some companies like you to put their VAT number on the invoice too.

When issuing terms, you may want to ask something like: “Our terms are 14 days from the date of invoice. Is there any reason why you wouldn’t be able to meet those payment terms?”

The answer could be a deal breaker if they tell you they pay all suppliers on 60 days, and there’s no room to negotiate!

It’s not an interrogation!

We don’t want to bombard a prospective customer with all these questions before we’ve agreed to do business if they don’t affect our decision to work with them, but they must get asked before any delivery takes place.

Many businesses will have a discovery or scoping session with a customer once contracts have been agreed upon. That would be a great time to add these questions to that conversation. If you don’t have one in your customer journey, consider adding a welcome call to gather the necessary information. Remember, every conversation is an opportunity to build the relationship with your customer.

Most importantly, be consistent. Ask the same questions of every prospective/new customer. Build the habit. Use a checklist to remind you.

The information you gather now will save you hours in emails and calls chasing payment, protect your cash flow and prevent sleepless nights!

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