How can you detect and avoid bad paying customers?

[jrineakter]

26 % of Spanish companies have had problems with late-paying customers in 2017. Delays in customer payments often lead to liquidity problems . And if your business is just starting out and/or if you pay your suppliers on the invoice date, having problems with your cash flow can be especially dangerous. It is not easy to avoid late-paying customers, because it is not easy to know in advance who they are. But in this post we are going to give you 5 tricks that will never fail to detect and avoid late-paying customers.

5 things you can do to detect and avoid bad clients
1. Check the lists of defaulters
Before closing a deal with a client, especially if it is an order involving a significant sum of money, the smartest thing you can do is check if your client appears on any of the lists of defaulters that exist.
In Spain there are three private registers of defaulters: ASNEF , Experian Business Bureau and the Register of Unpaid Acceptances , known as the RAI Register:

RAI Register The RAI Register is a database that includes all legal entities whose debt is equal to or greater than €300. In addition to this requirement, for a company to be india number data included in the RAI there must be a document signed by the debtor certifying that the debt exists. Therefore, the types of debts included in the RAI Register are current account promissory notes, bills of exchange or current account checks.


The ASNEF register , unlike the RAI register, not only includes information on legal entities in default (ASNEF Register for Companies), but also on individuals (ASNEF Register for Individuals). In both cases, these are debts that may or may not have been accepted by the debtor.


Experian Business Bureau This list includes information on outstanding credit transactions , both for individuals and legal entities. It is the most consulted list in Spain. It contains data on more than 500,000 companies in arrears, which together account for more than 65 billion euros in debt.
2. Learn about the company
If the client you were going to do business with is on one of the lists of defaulters, obviously there is no deal to be closed. But if it is not, find out about the company anyway and analyse its financial and economic reports in detail .
First of all, find out if it is a real company, that is, does it appear in the Commercial and Property Register ? If not, forget about any agreement you might have reached. The company in question does not exist. If it does exist, it is important to know its current status in order to have as close to reality an idea as possible of who or who you are about to close a business agreement with. It is advisable to know how long the company has been on the market, what its corporate structure is and who its managers are, what numbers it presented in the balance sheet and income statement for the previous year, its billing history, its cash flow statement (to know its level of solvency), its level of indebtedness, average payment period, etc.