We’re in an industry that makes up over 20% of all insolvencies.
So if you want rock solid business relationships build them on a foundation of due diligence, not a handshake. Here’s what you need to know about building trusting work relationships with due diligence.
Conducting due diligence should be part of new business engagement from your customers, suppliers and contractors to project managers, employees and anyone else who has the ability to impact your project.
It weeds out the shonky and lets you start your relationship with confidence.
Here’s a list of potential questions, areas to investigate, and where to find the answers you need when performing a basic due diligence.
Head to ASIC registers search for company information to find out:
- Is the company currently registered?
- Are there any events or concerns about their current or past?
- Is this the actual business that you were first introduced to?
- How long has this company been successfully trading?
- Who are the directors and officers? How credible are these people?
- Are there current or past court judgements, payment defaults, or corporate notices against the company or the directors and officers, or any organisation they are associated with?
You can check ABN and GST status (are they registered?) online at www.abr.business.gov.au
Other questions to ask:
- Is your customer paying by cash or do they have a mortgage?
- If the mortgage option is sought, how sure are you that there will not be no problem with the mortgage down the track?
- Can you get references or samples for past work?
Other useful links from http://www.australia.gov.au/
Australian company numbers – Australian Securities & Investments Commission (ASIC) page with information about Australian Company numbers and where they must appear.
Personal Property Securities Register – A great resource for businesses that lease or supply goods, in the event that a debtor defaults or goes bankrupt.
Published Notices (Insolvency Notices) – Publishes notices, including insolvency and external administration-related notices, including company de-registration.
Finally, if your customer is a builder, then you want to know who their customer is. This has multiple benefits including applying your security of payments rights and understanding if your client will have any issues with their client.