It seems like an easy question when you are meeting with prospective clients, “What do you do?” They tell you and walk you through on a ‘high level’ how their business works. They explain some of their history, how they got involved in the business, where their business is headed, what their customers are like, and sometimes much more than you ever thought of asking. Within this information are some basics that we sometimes can gloss over, especially since they seem so fundamental: they receive an order, sell a good or perform a service, and they complete it. What more is there to know?
Sometimes, more than you thought possible…
The #1 reason for delay of an initial new client funding can be attributed to not being able to structure a funding solution because the information is received late in the game. This information can include client names not being accurate in various places, including on the invoice, payment requirements being maintained including insurance needs and licenses, and more typically, the customer/debtor terms of the order directly affecting the payment of each invoice.
For invoices of any significant size, a contract, purchase order or other documentation outlining the company’s responsibilities between your prospective client and their customer is almost sure to exist. Orders generally reflect the agreed upon price, the payment terms, what triggers billing, any insurance requirements, potential offsets or assignability, and more… Because of this, the next time you receive a complete application package and have any doubts about fully understanding the prospect’s business and billing (and I mean ‘any’ doubts), consider phoning the company again for a more in depth discussion prior to processing their application.
Even if you are in the process of waiting for a prospect to respond with a completed application, what better reason to make that follow-up call and engage them than having them talk to you more about their business and how they operate that business. Understanding what they do can only help you, a factor, and the client, as they will not have to deal with ‘surprises’ later. Have them describe their billing processes and their customers’ payment history. The company may even become more comfortable with you because you are taking an active interest into their business and truly how it works – you’re taking that extra step to build the relationship – you are showing them you want to understand their business and their needs.
It is always better to understand this dynamic prior to sending documents… prior to leading a company on (as they say). Why waste your time… or theirs. No surprises. That should be the motto, right?