After a tumultuous 2019 and a somewhat disastrous start to 2020, businesses around Australia have been feeling the ‘pinch’. As a result, we are encouraging all clients to consider their position and their risk management strategies.
Over the last twelve months you may have seen some of our articles addressing our five top considerations for businesses:
In the remainder of 2020 and moving forward, it will be pivotal for all businesses to have an effective strategy for dealing with clients, from risk protection (such as taking additional measures to secure debts such as PPSR registrations, guarantees and indemnities) to debt recovery procedures (I will spare you a second ‘principal’ v ‘principle’ discussion).
Unfortunately, carrying debtors is a commercial reality for most businesses and many will have been carrying debtors for even longer thanks to the temporary changes to the law because of Covid-19. That being said, if you have the right policies and procedures in place from the start of your relationship with clients and follow through effectively, you won’t have long overdue accounts and you will have potentially secured any risky debt. Accordingly, you can maximise your prospects of recovery and hopefully prevent yourself from becoming another insolvency statistic.
While many clients are proactive in talking to us once they have a ‘problem’, it is important to remember that lawyers are often most effective on the front-end of transactions. There is a reason that lawyers operate from a position of ‘risk aversion’, because we have seen the damage that can be done when simple steps are not taken at the commencement of a commercial transaction. Whether it be guarantees, indemnities or registered security interests, there are steps that can be taken at the start of a commercial transaction that will provide additional levels of security and surety throughout the transaction.
That being said, if you find yourself in a difficult situation regarding accumulating or outstanding debt, it is always best to reach out and discuss your options with us sooner rather than later.
Working alongside our corporate commercial clients, we help to not only minimise your risk on the front-end of transactions, but also to maximise recovery prospects with the minimum of costs when recovering debts on the back-end.
If you want to find out more about our expertise in debt recovery and insolvency, please download our Capability Statement here or contact us.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.