Undoubtedly the last two years have if anything, been different. However, one thing never changes if you are in business and that is the maxim cash is king.
On that segue, we had a client in the office about a matter for which she was wanting our firm’s assistance and the conversation led to the Christmas break and the inevitable consequences for some companies which may have cash flow difficulties during the Christmas shutdown. This Christmas may be even tougher for some companies which have been adversely impacted by Covid.
That led us to discuss the difficulty she was having in collecting some outstanding debts. Her firm had done everything required of it in supplying the contracted services, but the clients weren’t paying. We offered to assist and within 24 hours the client had provided our firm with the executed agreements, the invoices and the contact details. Six clients in all, with outstanding fees totalling about $60k and some going back to last February.
It’s amazing to witness the positive impact of a courteous, well-drafted letter from a law firm to a tardy debtor can create for the client. We asked for payment by all six debtors by 10 December. Out of the six outstanding amounts five companies met the payment date. The last debtor didn’t acknowledge the correspondence until we threatened legal action and the amount was paid within a further 7 days.
It may well be that your debt collection techniques are not up to scratch and if so your company needs to implement a documented procedure. This procedure should progress from a courteous reminder at say 45 days to threat of legal action after say 65 days with a complaint issued at the appropriate legal jurisdiction (e.g., Magistrates Court for amounts owing less than $100k) at say 75 days overdue.
If your company has some tardy debtors, and you need the cash before Christmas, we can assist. We will act proportionately and reasonably to ensure your business has the best chance of collecting its outstanding debts. Call the team at Apres Legal if you need our services.
Book a complimentary 30-minute assessment with a member of Apres Legal’s team.
Disclaimer:
This article is not legal advice and should not be relied upon as legal advice. All articles from Apres Legal are intended to provide informative information. Legislation and case law may have been simplified and/or paraphrased. If you would like legal advice based on your current circumstances, you should contact Apres Legal.