Prevention is better than cure
When a lucrative contract comes along, many business owners forget the most basic safety precautions—and are completely taken by surprise when the invoice isn’t paid later on. Take the time to check your new customer’s creditworthiness.
The easiest and quickest way to check the creditworthiness of your future customer is to obtain an extract from the debt collection register at the customer's place of residence or business. For the application, you can download the form from www.betreibungsschalter.ch use. The extract costs around 20 francs. You will receive it if you provide proof of interest. This is a document that proves that you are in contract negotiations with the customer - for example, an order or offer.
You can see from the debt collection register extract whether there are or have been debt collection proceedings against your customer. You should be careful with the following entries:
- The extract contains many debt collections from various creditors with small amounts.
- In the case of one or more debt enforcement proceedings, it is noted that the payment order could not be served.
- Your customer has already been charged for taxes, VAT or social security contributions.
- In the case of one or more debt enforcement proceedings, a seizure request has been made or bankruptcy has been threatened.
If the information in the debt collection register is not sufficient, call the creditors who have previously pursued your customer and therefore appear in the statement. This will provide you with valuable additional information about your customer's financial situation.
In addition to the debt collection register, there are other sources of information:
- Take a look at the commercial register - the quickest way to do this is online at www.zefix.ch. Frequent changes in management or the board of directors, previous liquidations, a c/o address or a very broad company purpose are not good signs.
- Take a look at the company's homepage. Is it professionally designed and does it give you an insight into the company's activities?
- "Google" your customer's company name on the Internet. You may get information that you should have before signing the contract.
- For large orders, it can't hurt to take a look at the potential new customer's business yourself before signing the contract.
If you have not found anything suspicious about your customer, you can accept the order. For larger orders, however, ask your customer to sign the written order confirmation or offer. And request a down payment of one third of the quoted price.
You can see from the debt collection register extract whether there are or have been debt collection proceedings against your customer. You should be careful with the following entries:
- The extract contains many debt collections from various creditors with small amounts.
- In the case of one or more debt enforcement proceedings, it is noted that the payment order could not be served.
- Your customer has already been charged for taxes, VAT or social security contributions.
- In the case of one or more debt enforcement proceedings, a seizure request has been made or bankruptcy has been threatened.
If the information in the debt collection register is not sufficient, call the creditors who have previously pursued your customer and therefore appear in the statement. This will provide you with valuable additional information about your customer's financial situation.
In addition to the debt collection register, there are other sources of information:
- Take a look at the commercial register - the quickest way to do this is online at www.zefix.ch. Frequent changes in management or the board of directors, previous liquidations, a c/o address or a very broad company purpose are not good signs.
- Take a look at the company's homepage. Is it professionally designed and does it give you an insight into the company's activities?
- "Google" your customer's company name on the Internet. You may get information that you should have before signing the contract.
- For large orders, it can't hurt to take a look at the potential new customer's business yourself before signing the contract.
If you have not found anything suspicious about your customer, you can accept the order. For larger orders, however, ask your customer to sign the written order confirmation or offer. And request a down payment of one third of the quoted price.
Book tip
Write more professionally
180 Letter and Contract Templates for Everyday Business in Switzerland
The new business reference work "Writing professionally" contains 180 ready-to-use templates that no SME should be without. Whether credit checks, debt collection and recovery or ordering - this practical collection of templates is supplemented by examples and legal recommendations from Beobachter's consulting practice.
1st edition 2010, Beobachter-Buchverlag, ISBN 978-3-85569-421-1, 320 pages incl.
CD-ROM, hardcover, Fr. 58.-
Do you need legal advice?
The Beobachter Consulting Center offers you and your employees expert advice by telephone on legal issues concerning your company - 6 months for only Fr. 99.-. Order the consulting package for SMEs at
www.beobachter.ch/kmu or 0800 83 0800.
The Beobachter Consulting Center offers you and your employees expert advice by telephone on legal issues concerning your company - 6 months for only Fr. 99.-. Order the consulting package for SMEs at
www.beobachter.ch/kmu or 0800 83 0800.
