Protecting Businesses’ Interests Against Unrecoverable Debts
Debt collection can be an uncomfortable process for all parties involved. It is therefore important for businesses to understand how to protect their interests and to minimise their exposure to bad debts and debtors.
The most efficient way for a business to protect itself against bad debts is to ensure it has a properly drafted and executed supply contract, terms of trade agreement or credit agreement in place before entering into a business transaction.
Such an agreement should clearly outline the rights, responsibilities and expectations of all parties to the transaction and include unambiguous terms and conditions in respect to the supply of goods, payment. Any agreement must also outline a dispute resolution procedure.
It is also important for businesses to have a systemised internal account handling and debt control process for invoicing and following up late payments. This process should include maintaining accurate and detailed records of actions and events relating to outstanding payments.
When an account becomes overdue, and all reasonable attempts to contact and negotiate with the debtor have failed, it may be necessary to seek legal advice to understand the options available through a formal debt recovery process.
Professional debt collection advice is recommended as creditors must adhere to the Australian Competition & Consumer Commission (ACCC) and the Australian Securities & Investment Commission (ASIC) debt collection guidelines on acceptable debt collection practices. These guidelines set out the best practice and guidelines to follow.
Experienced debt collection lawyers have clear collection processes in place to collect debts quickly and efficiently and can assist clients and businesses with issuing letters of demand, serving statutory demands, filing claims in all Courts and Jurisdictions and enforcing a judgment order.
DSS Law has lawyers and paralegals who are experienced in providing expert advice on the debt recovery process in all jurisdictions throughout Australia.
DSS Law insight articles are intended to provide commentary and general information. They should not be relied upon as formal legal advice. If you would like specific advice relating to this topic, please contact DSS Law on email@example.com.