A pragmatic entrepreneur should apply the limited trust principle. It is the best to start from checking of the future business partners in generally available sources of information, such as the National Court Register or the business activity record. Information on the capital of the company, the financial documents and the data of the persons authorised to representation of the company will be found there. It is also not a secret that the Internet constitutes a pretty rich source of data on the ongoing activity of the company.
When the desired agreement is being signed, it is worth keeping calm. A great dose of wisdom and caution is advisable. The agreement must contain all arrangements between the parties – the price of the service, the time limit for its performance, the payment conditions as well as the potential penalties. Assistance of a lawyer who will advise to establishment and inclusion of the provisions on sanctions and other retrenchments in the agreement will be helpful. An important provision is also the possibility to withdraw from the agreement in case of lack of payment, with reservation of the obligation to pay for the realised service. We should also make sure that in case of any amendments, they are added to the agreement in the form of annexes. And what is the most important – the agreement should be signed by authorised persons; otherwise, it will be null and void.
A good idea improving the safety of the transaction is also the blank promissory note, thanks to which we may obtain the order for payment in court. But we should be careful here – it is worth as much as the property of its issuer. Enforcement will be effective if they really have it.
One of the options is also conclusion of an agreement with the insurer that will compensate us for the loss in case when the business partner fails to pay us. And if we want to receive cash from the issued invoices quickly, we may always use factoring. The right to the future claims in relation to the business partners passes to the Factor and the entrepreneur obtains the financing. Then, we minimise and even eliminate the insolvency risk, since in case of full factoring it is the external institution that takes over the risk of lack of payment for the invoice. Therefore, we receive financing and we do not worry about the future repayment, like in case of a credit.
As it may be seen, there are a lot of ways to protect ourselves against the jams – a pragmatic entrepreneur should be aware of them and have an ace, and preferably a couple of them, up their sleeve.
Published on: 24 October 2016