At the start of February, I spoke to a client I had visited in December of the previous year due to a debt issue. The client had weak terms of trade at the time that were rehashed from an old set the previous owners had left behind. They were inadequate and failed to protect the business in critical areas that it had exposure due to dealing with new customers. I quickly ended the policy of extending $5,000-$10,000 credit on a verbal agreement over the phone and helped to implement terms of trade, Personal Property Security Registrations (PPSR) and credit checking processes for the business.
The client decided in December to make his business more professional, make his company a lot more secure and make his job in business a whole lot easier. He took his initiative and saw a chance to add value to his business, and comprehensive terms of trade and being a secured creditor through the PPSR did just that.
I emphasise the decision made in December because that decision made a month prior saved him $25,000. In January, a company had attempted to not pay $10,000, which our implemented terms of trade and effective collection process solved at no expense to our client due to the legal ability to on-charge the debt costs. In the same month, a company had entered into liquidation owing $15,000 to our client, which was paid in full from the liquidator due to being a secured creditor.
Speaking together, we agreed that he needed to put things in place when he did and that being $25,000 better off was much better than losing the money. I am thrilled with this outcome and can’t stress the importance of getting comprehensive, industry-specific terms and conditions of trade in place while things are going well in business.