Kearley Lewis: Experts in Commercial Debt Recovery

If you have visited the Lewis Holdway Lawyers website recently, you would have noticed a link to the “Lewis Holdway Community”. Follow that link and you are taken to a new page outlining the organisations that our firm is associated with. The longest standing association is the one we have with Kearley Lewis mercantile agents. The two organisations boast a successful trading relationship spanning 23 years. We are proud of our association with Kearley Lewis and in line with our commitment to reducing the cost of using the law, our firm supports the work of Kearley Lewis by offering their clients fixed-fee legal work up to Pre-Hearing Conference stage on debt recovery files that are escalated to legal action.

In this two-part article, we hear from Julie Lamers the General Manager of New Business at Kearley Lewis about the importance of debt recovery for your business. It is sage advice for our business-owner readership and we encourage you to contact Julie for a discussion about how Kearley Lewis can benefit your business. You will find that the debt recovery process through Kearley Lewis is easy and surprisingly affordable.

Keeping your Cash Flow Healthy

We’ve started the new financial year and many of our business customers take the opportunity to review their debt collection processes and procedures, to ensure they maintain a healthy cash flow and minimise potential bad debts.

When your business is winning new business, it’s great for your P&L but if you don’t follow up your invoices and get paid, it’s not great for your cash flow. If nothing else, this makes debt recovery critical to your business if your invoices do not get paid on time.

Taking care of Business: the role of debt recovery for your bottom line

As a business owner and operator, some questions to ask yourself about following up your invoices are:

Do you need to review your credit terms or invoice frequency?

You may or may not have standard credit terms that you offer your customers. How promptly do your customers pay against their credit terms and does this payment cycle work for the cash flow of your business?

It may be that you need to think about having shorter credit terms so that you are paid more quickly.

Similarly, you may also wish to look at how frequently you invoice. If you invoice monthly, would it be beneficial to your business to invoice weekly? The sooner you invoice for the goods or services you have provided, the sooner you will get paid.

Do you follow up your sales invoices?

Follow up your customers by calling them to confirm delivery or satisfaction with the goods or services you have provided; if there are any reasons that could give rise to a dispute, find out early and not when payment is overdue.  The sooner you resolve any issues, the sooner you will be paid.

Stay close to your customers, ensure they are aware of your terms of trade and from the start, ensure they know that you chase up your invoices promptly. Those who shout loudest get paid first!

Watch your customers carefully if their payment patterns drop away or if third parties or different parties are paying their invoices for them. Any anomaly in the usual business relationship should trigger questions because you may need to put them on alternative payment terms. Operating prudently avoids having the argument about liability later on, and gets you paid sooner.

Do you need to review your terms of trade?

Do you have a clause in your terms & conditions that will allow you to recover your debt collection costs back from your debtor in the unlikely event that they do not pay?

If you do incur costs, you want peace of mind that you can recover those as well as the debt.

There are many clauses that can assist in the speedy recovery of your debts, they include:

• Caveat / charging clause
• Jurisdiction clause
• Cost clause
• Security interest clause under the PPSA (Personal Property Securities Act)

These are just some tips, for now, about best methods for keeping a healthy cash flow.

Stay tuned for the second instalment of more tips which we will publish in the next edition of Directions.

Julie Lamers (General Manager, New Business)

Kearley Lewis Pty Ltd

Kearley Lewis specialises in providing ‘business to business’ debt collection services directly to businesses. They work alongside Lewis Holdway Lawyers which provides commercial legal services and experienced Law Clerks undertaking the telephone collection services.

They have excellent recovery rates and highly competitive fees. They also offer a range of commercial services Australia-wide including credit checks, payment defaults, company & business searches, title searches and credit applications.

If a business is supplying goods or services to any industry throughout Australia, Kearley Lewis can assist with the recovery of outstanding debts. Their highest source of new business is referrals from existing customers and business partners.

If you would like to talk to Julie Lamers about how Kearley Lewis can assist your business with their debt recovery, please contact her on (03) 9629 8777 or visit the website on www.kearleylewis.com.au for more information. You can also follow Kearley Lewis on LinkedIn for up-to-date business articles.