How to Identify Your Debtor


As a supplier of goods or services on a credit basis it is crucial that you know exactly who you are dealing with at all times.

Taking an order and then supplying goods in the name without investigation is poor business practice that inevitably results in the need for debt recovery and a lesser chance of a successful debt collection.

To avoid a potential bad debt that may require the services of a debt collector you should always ensure that any order for goods or services is written or better still that a Credit Application Form is completed. By doing this debt collectors will be better placed to effect a successful debt collection for you.

Business Entities

When supplying goods on a credit basis you must be aware that you are dealing with a specific business entity and only that entity is responsible for payment to you.

There are 3 main types of entity:

  • Companies
  • Individuals
  • Registered Business Names

All business entities in Australia should have their own unique ABN (Australian Business Number). For example Score DM Pty Ltd has an ABN of 55113230247.

Go to to get a FREE ABN Search and compare the information there to that which was provided to you by your potential client. It should match. If it does not then investigation is warranted.

A debt collection agency or solicitor cannot collect or sue unless the entity that was provided the credit can be clearly identified.

Companies (& Associations)

  • Almost always include the words Pty Ltd, Limited, Inc. or Association in their title
  • MUST be incorporated with ASIC (Australian Securities & Investments Commission). It will have its own unique Australian Company Number (ACN) provided by ASIC. For example Score DM Pty Ltd has an ACN of 113 230 247.
  • It is advisable to conduct a company search on the name to ensure that the name at ASIC is EXACTLY the same as the name on their order or application for credit. A full company search will also give you the directors and shareholders names and addresses, and a lot of other useful information. You can order this from any number of information providers or from Score Debt Management.
  • A FREE Basic company search can be extracted from ASICs website at and this should always be done before credit is extended. Always select the last option “All Names”. In the Organisation name box…type the name exactly as per your order. The name and possible alternatives will be displayed. Click on the one that you want and basic information on the company appears. It will confirm the companies name, ACN, ABN and Status. The status should read “Registered”. If anything else appears in the status field e.g. ** UNDER EXTERNAL ADMINISTRATION and/or CONTROLLER APPOINTED ** or DEREGISTERED then do NOT extend credit without further investigation.
  • Be aware if you are dealing with a company that only the assets and / or income of that company are available to you in the debt collection process. You will have no access to the assets or income of any directors or any associated companies. For this reason it is advisable that whenever possible directors’ personal guarantees are sought.


  • Is a solitary person normally trading in their own name or via a registered or unregistered Business Name (see later)
  • The income and many of the assets of an individual are available to you (subject to encumbrances upon them) in the debt recovery process.
  • It is a regular practice for individuals in business to maintain their asset holdings in another person’s name (e.g. their spouse) or sometimes through a company.

Registered Business Names (the entity you trade with is its proprietor/s)

A Registered Business Name is just a name. It will have one or more proprietors that may be a company, an individual, or a combination of either or both.

  • Liability for payment of your debt is vested with the named proprietor/s.
    • For example Score Debt Management is a registered business name. Its proprietor is Score DM Pty Ltd. It is Score DM Pty Ltd that is liable for debts.
  • Do a free ASIC search from and if the name does not appear, or has a Status other than Registered, then it does not exist. You should approach the debtor again and gain from them (in writing) their correct entity name and run through the check process yet again. If they state that the proprietor is a company or individual then have them apply for credit again using that name. If they cannot clearly identify who the proprietor is then do not extend credit.
  • The chances of a successful debt collection from an unregistered business name are lower than usual, especially if you cannot identify who actually is /are the proprietors of the business.
  • If the business name is registered then it would be prudent to get a full search done to find out who the listed proprietors are. Alternatively contact the debtor again and get in writing the name of the proprietor, check it, then open the account and conduct all business in the proprietors name rather than the business name

What does this all mean?

By following the processes above you can rest assured in the knowledge that if you experience a bad debt the chances of a successful debt recovery are greater than if you just supply to a name without any investigation.

Once you have extended credit closely monitor any payments and particularly the remitter details on any cheques you receive. Make a note of that name on your files for later reference. After all if they were paying you in that name a case can be built that they were also dealing with you in the same name.

If at any time you are concerned about the identity of your debtor, or just require assistance, call Score Debt Management on 1300 729 809 and we will do our utmost to help you out.