A credit application and terms of trade form the basis of your relationship with customers. They establish the rules of the game and if a problem occurs with the relationship, you want to rely on these documents to resolve the issue.
Just like a prenuptial agreement, when the relationship is travelling smoothly, you don’t give it a second thought, but if things go awry, it’s the document you reach for to check your options.
A well drafted credit application and terms of trade will pay big dividends over many years by removing any uncertainty about what was agreed between you and your customer. AMPAC regularly relies on these documents when chasing overdue debts and sometimes we find they are lacking in protection.
Below are a few clauses which can help you recover overdue accounts and reduce the associated costs.
Compare the clauses listed below against your current credit documents to identify where you could benefit from a small investment which will pay you back many times over.
Do your terms contain a Cost Recovery Clause?
Do your terms contain an Interest Clause?
Do your terms establish jurisdiction?
Have you considered PPSA in relation to your business?
Do your terms contain a Personal Guarantee?
Does your documentation allow you to vary the way you do business and your terms of business?
Do you require your customer to warrant their information?
Is your position secure when dealing with trusts?
Do your terms limit your liability?
These are just a few things to consider, and should be part of your ongoing credit risk management which costs little, but returns lots.
Mark Logue is a debt collection specialist and the joint managing director of AMPAC Debt Recovery. He has more than 30 years’ experience in the debt recovery and credit reporting sector, covering all segments of industry and commerce throughout Australia and overseas.
Mark can be contacted by phone on 0409 749 709 or by email at firstname.lastname@example.org
Do you have debt that needs recovering? Are you unsure on where to start? Contact AMPAC Debt Recovery for solutions today and speak to one of our qualified consultants to get you started.