across the bar

tips for hard times

by Steve - Posted 07 October 2008

First off big apologies from the Nicciferguson team for the lack of blog posts. Lets just say that we have been extremely busy blah blah.

Over the next few posts we are going to offer some tips on what you can do on the legal side to make sure these testing times don't test you too much?

Tip

Our first inclination when the economy appears troubled is to look inward at our own business. We tweak and manage ourselves into tip top shape, trimming excess costs and making sure our operations are running smoothly. But what if the problem lies with our clients? If you are noticing your book debt is creeping, it may be time to check the financial health of the people that keep your doors open.

1. Update credit checks on your clients. Make sure no new judgments or adverse listings have been loaded against them.

2. Check existing security to make sure the equity in it still covers your exposure. If you answered "security - what security", have a drink instead.               

3. Give your defaulting clients a buzz and consider offering better payment terms. It may take a little longer, but at least you get paid.

4. If the writing is on the wall, check the breach clause in your contract and check when you can cancel the contract due to financial difficulty (usually when a judgment goes unpaid or another act of insolvency has been committed)

5. Don't let bad debt grow old. The older a debt, the harder it is to recover. The quicker you get the ball rolling with legal action, the better chance you have of grabbing a few deck chairs on that sinking ship.       

6. Always deal professionally with your debtors. They may live to fight another day (and be a source of lots of work in the future).