Debt Recovery - What are your Rights as a Small Business? - 9/08/2016

By Alexi Boyd |

Small Biz Matters – a half hour program each week where you can work ON your business rather than IN it.
Small Business Bookkeeping Tips
with Alexi Boyd from Boyd Office Management Services
Date: 9 August 2016

Intro:

Debt recovery can be the downfall of your business; it can take only a handful of uncooperative clients or a slip-up in your client agreements to create a hole in your cash flow, sometimes big enough to swallow your business up. Is there any way to avoid this? What steps can you put in place as a business to reduce that risk, and when the worst case scenario happens, what are your rights?

Here with us today is just the expert you’re looking for. Sean Keleher Is a locally based Solicitor specialising in Small Business :aw and has developed a product to support small business debt recover. He’s here to share with us his expertise and valuable insight from which we can all learn.

A: So Sean, welcome to the show. Can you tell us a little bit about your experience and what led you to supporting small business in this way?

S: (Explains about his multifaceted experience led him to support small businesses now)

Discussion Points:

Discussion about Debt Recovery Industry

  • How do large houses like Dun & Bradstreet work? (often run by overseas call centres contacting your clients, costs, minimums)
  • Why would you choose a solicitor rather than D&B

Do your research!

  • When considering setting up your client agreements, remember to look into industry practices, talk to your professional organization – what is standard?
  • Client agreements
  • This is the best time to engage with a solicitor – saves you money and time in the long run

How can you protect your business from non-payers?

  • Setup concrete payment terms on invoices, estimates, quotes which clearly state interest costs, late payment fees & indicate this to client the first time you engage with them
  • Consider offering discount terms for early payers
  • Offer a “conversation” rather than engagement terms which enable them to contribute to them

You suspect your client is likely not to pay – what now?

  • A misunderstanding doesn’t need to cost you the earth in legal fees
  • How are you protected – remember your rights

My supplier is giving me the run around – how is it best to deal with this scenario?

  • You have rights too as a consumer!
  • The consultants issue
  • Their idea of what they will delivering can differ greatly from what you’re expecting as a client
  • Timing is also a major issue
  • These can lead to arguments over what was delivered
  • What can you do to protect your self?
  • Tradies are still a major issue despite lots of legislation in this industry to protect them and their clients

What can you expect from a commercial litigation lawyer & what is the process?

  • Write, send and follow up Letters of Demand
  • Deal with wholesalers/suppliers where agreements can’t be relied upon
  • A clear pricing structure
  • How do you keep out of the courts?
  • What’s the role of a mediator vs a judge?
  • They can also help with the sale of your business.

Where else can you get support?

  • Small Business Commissioner offers support to help you avoid court as a mediator

 

(Image courtesy of https://www.flickr.com/photos/59937401@N07/)