Why it is important to have a Background Check
Every relationship your company creates with clients has value –
every contact has the potential to grow into a long-lasting
relationship and source of additional revenue.
However, every client relationship takes considerable time, effort,
energy and patience before they can become a dependable and
trusted part of your business. It’s a considerable investment, and
when a relationship fails you’ve usually lost quite a bit of time and
effort along the way. In this article, we will discuss several
techniques you can use to screen out potentially negative clients
such as non-payers, clients likely to be litigious, clients with bad
credit or financial problems and clients that are just not worth your
effort.
The best way to establish a basic level of protection and discover
who you are dealing with is to perform basic background check
prior to spending your time and resources to their project.
With minimal research and effort, a surprising amount of these
potentially problematic clients can be identified before you expose
yourself to any risk. There are several companies that provide
basic background check services for a minimal fee that will allow
you to weed out clients that you will not want to do business with.
When Should you do a Background Check on a New Client? Every
time. There that is pretty simple and straight forward, but it is certainly
the easiest way to always have a basic level of understanding of your
client.
You can certainly take your valuable time to do web searches and
may learn a few things about your client, but aren’t you better off
outsourcing this function, and paying the few dollars, so that you
can spend your time providing a service for which you are better-skilled,
and thus generating more income for you and your employer?
There is a wealth of information that will be provided about your
client. Information that can be used in certain areas and at specific
times in your ongoing relationship will provide ease of mind and alert
you to potential problems, if there are going to be any during this
relationship.
A basic background check will provide information regarding your
client’s location and length of time at their current or any previous
addresses. A check that includes information from the local state or
county will verify licenses,permits and tax information. These should
be obtained once a negotiation has started or a proposal is in process.
Once there is a signed contract, however, it’s time to do a comprehensive
check on the company and make sure that the contract is going to be
enforceable and collectible. The goal is to make sure that the client is
who they say they are, confirm that the signatory is authorized to sign
on behalf of the company, and verify that the company is legal and doing
real business. With those three items in place, you can comfortably begin
the project knowing that you are, in fact, legally protected by the contract
or legal agreement.
What are other types of information that you will need? Background
check service providers vary greatly in the information that they provide
and the cost for it. There is truth in the old adage, “You get what you pay
for”. Providers that promise information for less than $20 will give you less
than $20 worth of information! It is always best to deal with a provider that
has the resources available to provide access to more than one information
database to get better value for your money and better information regarding
the client you are dealing with.
After you have identified the client’s identity, location and business license
with the state, you will want to have information on your client’s financial
status. If there are liens or bankruptcy filings, this is a client to be wary
of. A list of assets, such as titles to real estate, vehicles or boats would
show whether there is tangible real property and any liens or attachments on
them. Any civil judgments, particularly involving principals of the company or
judgments against them by previous service providers would indicate a pattern
of not living up to agreements with previous business partners. They may be
trying to do business with you because no one else will have them, or they
are going into a relationship with you knowing that they have no intention of
paying for your products or services without legal action. A small investment
in a background check could save you thousands of dollars in legal fees in
trying to collect payment.
In the end, you can save yourself incredible amounts of time, stress and
money by doing a bit of due diligence at the beginning of a client engagement.
Considering the low cost of record searching and the incredible hassle
associated with collections and litigation, background check research is one of
the best insurance policies you could ever find.
It is wise to protect your bottom line, yourself, and your business by doing a
little work up-front to find out background information.
Tags: Background Check