Debt recovery – All small/medium business owners have been here before – you have taken the time and care to provide your quality goods or services to a customer, and when it comes time for them to pay, you get radio silence or a refusal to pay. Your phone calls, texts and emails with payment reminders and attempts to follow up have been unsuccessful, and now, weeks or months later, you are exhausted and still have a large unpaid invoice, plus all the time and money you have spent on debt collection services.
In instances like these, recovering money for work you have already done for customers refusing to pay can be challenging, draining, and takes your attention away from conducting your business. Further, unpaid debts can cause cash flow issues which hinder your small business’s growth and financial stability.
Thankfully, there are things you can do to protect yourself from customers refusing to pay, and ways to address these situations when they do arise.
Firstly, one essential way to fortify yourself as a small/medium business owner from debt collection issues is to have robust contract terms. No matter what kind of business you are in, you will have to deal with contracts in some form. This could be contracts for sale of goods, ‘small jobs’ contracts, ongoing supplier contracts, or various types of agreements. Incorporating solid payment conditions and debt recovery options from the get-go can reduce headaches down the line by securing your rights and their obligations.
Secondly, in the event a customer does refuse to pay, there is a ladder of different legal steps you can take to recover your money. This can include issuing a formal Letter of Demand, lodging a claim with the Civil and Administrative Tribunal or the Small Claims division of the Local Court, and other enforcement options for collecting money.
If you are currently struggling with a customer who refuses to pay and looking for an efficient resolution, or would simply like more information to see how you can better protect yourself, contact Matthews Folbigg Lawyers.
Matthews Folbigg Lawyers has a specialist team dedicated to Insolvency, Restructuring and Debt Recovery. If you would like more information or advice in relation to Insolvency, Restructuring or Debt Recovery practice and procedure, please contact Stephen Mullette or Jeffrey Brown on (02) 9806 7459 or (02) 9806 7446,or email stephenm@matthewsfolbigg.com.au or jeffreyb@matthewsfolbigg.com.au.
