Bad debts can be avoided if business owners can make few necessary precaution before accepting new partners or clients. Below are some simple guidelines business owners can take before accepting any new partners or clients in the future.

Collecting Information Regarding Your New Partners or Clients

Before doing business with anyone, it is a good idea to search for their company on the internet. This is done to make sure that the partners and clients have a good reputation and track records before engaging businesses with them. The best place to find further information is in business forums that are available online. Besides that, you can also obtain a credit report on companies for free, or at a low cost. It is worthed just to ensure that business deals can be done smoothly. If the new partners or clients are hesitated to provide full contact details of their companies, you must see this as a red flag and avoid doing business with them.

Introduce Late Payment Fees

There are many businesses now have late payment fees imposed on their term of service. Bookkeeping and administration fees are substantial cost for running a business. Don’t pay the bill for someone else ’s irresponsibleness. If you partners and clients are aware of these extra charges impose on late payments before they doing business with you. They will think twice before delaying any payment in the future. This term must be clearly stated in the contract or agreement between you and your clients.

Keeping Record Of All Business Transaction

You must keep all the document regarding the business transaction you did with partners and clients. If possible, avoid discussion and sealing the deal about financial arrangement through phone. Email is more preferable as it can be treated as written record and has a higher legal value than the report of a phone conversation. If you really can’t avoid discussing them via phone, it is still important to keep record of the date and the discussion content of each call.

Before doing business with new partners or clients, please make sure that you already gather all necessary information that you can get your hand on about the partners or clients. Such information are contact names, company addresses, phone contact numbers, company registration numbers, license numbers, etc. If it is an online business deal, you should get a copy of the current WHOIS details regarding the company domain name registrant by using Domain Tools or other that you prefer.