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Unpaid invoices and silence from debtors

27th August 2019

Debt Recovery

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Good morning,

A good client of mine of 5 years standing has just gone into voluntary liquidation.
 
Like many businesses I had been guilty of extending my terms, continuing to provide services fearing the loss of a good client and hoping that payment would come. After having experienced several large losses, I decided to enforce my terms of trade properly. My retainer provides that if an invoice remains unpaid for 14 days then my services cease. Whilst I always keep communication open and consider each individual customer’s circumstances, I rarely deviate from my terms of payment. As a result of my diligence I have not suffered greatly from this voluntary liquidation.
 
Communication is essential to maintain respect between parties as all business suffer cashflow problems. In my own experience and that of clients, once a good customer starts getting behind in payments it is a sign that they are experiencing financial difficulties. You need to take early action to minimise any losses.
 
A major part of my practice is debt recovery . When prompt action is taken often successful recovery results. In many cases where action is delayed my clients suffer greater losses. A recent client came for advice about recovery from a major customer. I suggested urgent action but he did not heed my advice and decided to delay action. I sent a Letter of Demand but was restrained from taking further action. Against my advice, my client continued to supply the customer. In the 4 months since my letter, the debthas now increased markedly. I have been advised today that another supplier has closed the company down. 
 
If you need to review or put in place supply and purchase agreements or need advice regarding debt recovery, do not hesitate in contacting me.

Kind Regards,

 
Jeffrey 
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