Businesses paying debts more quickly since GFC

29-November-2010 Commercial Disputes

An interesting article in The Sydney Morning Herald in October 2009 commented on the statistics from Dun & Bradstreet’s trade payments analysis. 

The article, Businesses pay up more quickly,  said the analysis showed a fall in the payment terms for Australian businesses in the third quarter or 2009. This means companies are paying their bills sooner than they were previously.

Surely businesses have learned lessons from the global financial crisis and taken a more serious look at their engagements with their customers. Even if they were not directly touched by the financial meltdown, businesses had good cause to look at their debtors and assess their risk and exposure in the event their customers failed to pay what was owed.

As a lawyer helping Australian businesses in the ‘sharp end’ of credit control, we at Streeterlaw Sydney lawyers have observed some changes. 

There is an increased focus on checking existing or potential customer’s credit worthiness. It appears to us that businesses are also spending extra attention on:

  • ensuring that there is clear documentation that evidences payment terms 
  • tighter internal protocols that require orders be completed in writing by an authorized officer of the customer
  • A clear and common understanding of the terms of trade facilitates a more prosperous relationship for both customers and suppliers.  

Uncertainty or misunderstanding can lead to dissatisfaction, objections and queries of accounts and consequential delays in payment. 

Comment from Mark Streeter – Sydney debt recovery lawyer 

If you have clients not paying your invoices on time, you should consider legal action. Often just bringing a legal firm into the situation can speed up the payment process.

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