Who is your customer?

A core element of business is the provision of goods and/or services to customers/clients for a price. And it is difficult for a business to be successful if there are difficulties with collecting that “price” from its customers, because this affects the business’ cash flow and ability to fund its ongoing operations.

When signing up a new customer, particularly if the customer will have the benefit of an account payable after a specified period of time (e.g. a 30 day account), is it is imperative that business owners ask themselves the question – who is the customer? Failure to accurately identify who the customer is can lead to significant problems down the track if the account is unpaid and the business needs to rely on the court system to recover the account from the customer.  Unless you know the correct legal entity behind your customer, then you will have difficulties commencing proceedings to collect any amounts owed.  13031460-default-notices--no-genuine-customer-info-used

In most cases, the customer is an individual or a corporation. There are a number of free online searches that a business can carry out to correctly identify the true legal identity of their customer:

You cannot assume that the name, ACN and/or ABN given to you by the customer are correct.  You need to conduct your own due diligence to make sure you know who your customer is.

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