Prepare your business for any contingency. The best client relationship can turn sour at a moment’s notice, at which point you will need to be able to rely on your corporate records. Many collection cases are lost simply because clients fail to name and bill the correct corporate entity. In order to commence a legal action against the “customer”, you need to be clear about the corporate entities you are doing business with.
Proper set up of an account is one of the most important steps to insure collection down the line. Identifying and billing the correct entity is one of the most important elements in setting up the account. Although it may sound simple, it frequently is not. Often companies operate multiple businesses from the same location, sometimes using similar names. Doing so becomes very confusing and it is unclear as to which corporation is liable for the debt. Consider adding all the related enities to the account and invoice.
- Selling through a Managing Agent: The accounts should be set up to invoice both the Limited Liability Company or Corporation (owner) and the Managing Agent. A way to determine the owner of the property is by way of ACRIS (for NYC properties).
- Selling to Corporations, Partnerships & Sole Proprietors: Request a copy of the business’ tax certificate, certificate of incorporation or other documents which would reveal the debtor’s correct name.