Debtor Recovery and Receivables

Sometimes, and it is also the route most often misused. An application by an operational creditor under the insolvency framework requires a default above the prescribed minimum threshold, a demand notice served first, and no genuine pre existing dispute. That last point defeats a great many applications: if the debtor raised a quality or a quantity complaint before your notice, and it is not obviously spurious, the application is liable to be rejected and you have spent money to be told so. It is also a poor tool for a solvent customer you want to keep. Where a corporate debtor genuinely cannot pay and the default is clear, it is a powerful route. Where it is being used as a collection threat against a customer with a real dispute, it usually costs more than it recovers.

For most eligible suppliers, yes, and it is startling how few use it. A registered micro or small enterprise supplying goods or services is entitled to payment within the statutory period, and beyond it to compound interest at a multiple of the Reserve Bank rate, which is materially higher than commercial interest. The reference goes to the facilitation council in the supplier's state, which conciliates and then arbitrates, and an award is enforceable. The practical points are that your registration must have been in place at the time of supply, the buyer will often settle once the interest exposure is explained to it, and the process is considerably cheaper than a suit.

For a simple money claim on an invoice, the ordinary limitation period runs three years from when the payment fell due, and it is shorter than most finance teams assume. Two things extend it. A written acknowledgement of the debt before the period expires, which a signed ledger confirmation or a balance confirmation letter can amount to, restarts the clock from the date of that acknowledgement. So does a part payment in certain circumstances. A cheque dishonour prosecution runs on much shorter windows measured from the dishonour memo and the statutory demand, and missing those is not curable. If you have not reviewed your ledger against limitation, that is the first thing worth doing, because it decides what is still worth pursuing.

No, but it changes what this is. A raised defence, however thin, moves the account out of collections and into a dispute, and it needs to be dealt with on the facts: what was ordered, what was delivered, what was accepted, when the complaint was first made, and whether it was made before or after payment fell due. A complaint first raised in response to a demand notice reads very differently from one raised on delivery. We assess it honestly, including where the customer has a point, because pursuing a defective delivery as though it were a clean debt is how a creditor ends up paying costs.

No. Our Fee and Refund Policy rules out contingency and success fees and rules out taking any interest in the subject matter of a claim, so the fee is agreed in writing against the work rather than against the outcome. On a debtor ledger that is a feature rather than a limitation. An adviser paid a percentage has an interest in pursuing every account, including the ones that should be written off, and the most valuable thing we produce on a ledger is usually the list of accounts not worth chasing. We tell you at the assessment stage what we think each account is worth doing and on what basis, and that list is honest precisely because we are not paid out of the result.