23 September 2021
PRESS RELEASE: Debt management in the time of COVID – don’t delay
Businesses not prioritising debt management are putting themselves at risk warns Bartier Perry commercial partner Gavin Stuart.
“In the current environment with COVID and lockdowns it’s understandable many people will be hesitant to engage with customers about outstanding debts but in a cashflow-tight environment good business hygiene is more important than ever,” said Mr Stuart.
“When it comes to recovering what is owed to you, move early and move decisively. Proactive debt management results in more positive outcomes.”
Mr Stuart said it was misconception that debt recovery had to be a conflict driven and costly process.
“We know that non-payment of an invoice can be a sign that there is a commercial or relationship issue. That’s where it’s important to get the right advice on tone and approach because debt recovery done the right way can actually draw those out and repair or strengthen the working partnership,” said Mr Stuart.
“It may also be that a business works through different repayment terms that work for both parties when a debtor wants to do the right thing but needs more time.”
Bartier Perry has this month launched its online Debt Recovery Pathway to help clients navigate the most constructive and cost-effective way to recover a debt.
Clients can step through a series of options ranging from a simple pro-forma letter through to management of legal proceedings.
“In our experience over 70% of debtors pay after one of our letters of demand and legal proceedings are the exception rather than the rule,” said Mr Stuart.
One client had a portfolio of 18 debts owed ranging from $450 to $65,000 but totalling $244,000. Using the process now embodied in the Debt Recovery Pathway the firm recovered $221,000 of that at a cost of under $4000.
“The Pathway is an alternative in that it quickly allows our clients to understand their best next step and as commercial lawyers we can then navigate the client through the process, focus on early resolution and in many cases be up to 80% cheaper than a traditional debt recovery service,” said Mr Stuart.