There is no doubt in the fact that almost every business person dreams of selling their products internationally. However, while reaching for such an aim there come many hurdles and one of the hurdles is, recovering the amount owed by the customers. The problem is so big and important at the same time, that if we say one cannot think of doing business internationally without it then that wouldn’t be wrong.
As a lot of people look out for solutions to the steps that cause this problem, we decided to help our readers in the matter by listing down all the five important mistakes that you must keep in mind while taking your business to the next level.
All of these mistakes are directly related to the cash flows and hence taking care of them would obviously mean that you will also be able to invest your profits in improving your services and goods as well as growing your company’s reputation too. Doing so can also eliminate the need for hiring a debt collection agency for you especially when the case is easy.
Checking Enough Details About The Buyer
If you don’t conduct proper research on your customer, it will not only result in a mistake on your part, but there are chances that you might end up being a victim of any scam or fraud.
When it comes to the matter of having an international customer, management can become greedy. People often sell goods to customers who might not have well-established businesses. These people only target market penetration and growing sales and are often careless about paying back their debts.
This is where the real trouble begins because not gathering the necessary information about the customer then leads to a big room for them to run away without paying you.
Hence, the best practice is that before doing business with any potential client, you must do your research starting from knowing the website of the client, its business name, images showing their facilities, and also checking the emails thoroughly.
In extreme case scenarios, it is also advisable to confirm the company registration and VAT number before signing any deal with them.
If by chance you are dealing with a one-man band, then as asking for all the information listed above would be difficult, you can always ask for a copy of their passport or ID instead.
Not Getting The Documents Signed
If you have a document signed by the customer in advance, you will never have to worry about the debt collection hurdles with this one step.
A good example to explain its significance can be of a customer who signs and stamps the purchase order (PO), because that alone serves to be a solid proof for you when you want to recover the money from an international client. It would be even better if you keep the original copy with you because during legal proceedings such documents carry more weight as compared to anything else.
Furthermore, in some countries, it is more difficult to recover debt because of no proper framework. There too, a signed document then becomes proof which no one can ignore after all it shows that the customer intentionally bought the goods and also promised to pay in time.
While getting the document signed, you should also keep a strict eye on whether the signature is from a legal representative or a senior individual of the company or not. As later, the authority also matters a lot in figuring out the value of the signature on any document.
Not Getting A Written Customer Statement
Although you might think that a promise is a promise, in the world of business you have to take extra care of the fact that the promise is in written form sent by the customer itself.
So, when things go wrong, you always have the statement to go back to and remind the international debtor about the commitment which they made before in time.
Along with that, there are also more scenarios in which written customer statements can be the saving grace. For instance, if there is a shipment that has reached the destination in bad conditions, your common response would be to ask the customer to send photos as proof and also copies of the inspection reports. You must do this task on an immediate basis to get to the truth in the matter.
It is important here that photos alone do not mean anything, along with a telephonic conversation. Therefore, the customer should be required to come out with proper proofs and you on the other hand should be wise enough to set up the terms clearly with a written customer statement to avoid any such problems in the near future.
Not Batting An Eye On Disputes In Time
Most of the time problems also arise when you don’t deal with them well in time. Existing disputes can become massive bad debts if the invoices don’t get cleared. As a result, the customer receives the compensation that they usually look for with such tricks, and the international debt collection agencies along with businessmen struggle in the end.
Another important advantage of being able to solve a dispute well in time is having happy and faithful customers for the near future. But to do so, here too, you will be required to put out a proper description of what went wrong and also get it written down.
There is another important thing that you must keep in mind. It is not necessary that problems will involve you as an exporter. You can end up facing similar problems as an importer because if you are not going to make the claim in time, your disputed supply can then put you in trouble.
Now that you are well aware of all the mistakes, we hope that in this new year, you will give a new start to your debt collection policies and not make the mistakes that are listed above.