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Slow Paying Debtors | A Tail From The Horse’s Mouth

slow paying debtors

Slow Paying Debtors

Careers in the veterinary field attract those of us passionate about animal welfare.  You might assume that they would not have issues with slow paying debtors?

When Chris Wain Equine Veterinary Services in Queensland reviewed their cash flow, they were surprised to see how many invoices were going unpaid.

April Wain, Veterinary Nurse, said she identified two issues:

  • When they were called out, the welfare of the animal was the first priority, not thinking about the likelihood of a customer not paying them
  • Individually, unpaid invoices did not justify taking further action, typically they could be $300 to $600, however a number of invoices were not being paid, so it was impacting their cash flow

The Solution:

April needed a solution that would address the issue of non-payment, whilst being affordable so as not to cut into her margins. She also wanted to work with a team who were focused on results, but not at the expense of her reputation, brand or customer relationships.

April now has a membership with Kearley Lewis, whereby for $180 a year, she has access to unlimited debt collection services. She can utilise the services whenever she needs to, and only pays a commission when she gets paid.

Not only that, her terms and conditions have also been updated, so that the commission costs Kearley Lewis charges are paid by her customers when their payments are made.

Minimum of cost, margins maintained. Simple.

What does April say?

Kearley Lewis has proven to be an organisation that take pride in their interactions with clients and debtors alike. They have provided us with a personal service that takes into account the idiosyncrasies of the horse veterinary service industry. Being able to use their expertise to help us concentrate our efforts on providing the service that we pride ourselves on has been of immense benefit.

So far Kearley Lewis has been almost 100% successful in retrieving outstanding amounts, some as old as 12 months.

Ever made an incorrect payment online? | Mistaken payments

mistaken payments

A couple of months ago, I thought I’d paid the balance for our family holiday to the wrong bank account i.e. not to the travel agent.

It is easy to set up new payees online, and although we are asked to check the information before the payment is made, we all need to ensure always check thoroughly, and once we have set up our payees, that we select the right payee, because all it takes is a click .

The lesson I learnt from my mistake was that Banks don’t check the name of the account you enter when you transfer money online, they only check the BSB and account number. In my instance, I was lucky because it was only the account name I input incorrectly, so to relief the payment went through fine.

In the last few of weeks, we have had a number of enquiries from people who have paid an incorrect recipient online, and are looking to retrieve the funds. We have also had cases where employers have accidently paid a previous employee or incorrect employee and are seeking our advice.

So, what do you need to do when this happens?

Mistaken Payments: what is handy to know?

Firstly, the earlier that you notify your financial institution the greater the likelihood that the financial institution of the unintended recipient will be able to return the mistaken payment to you. Fast action in responding to the mistake and notice to the mistaken customer is key.

It’s good to be aware of the ePayments Code. This code regulates consumer electronic payment transactions, including ATM, EFTPOS, credit card transactions, online payments, internet and mobile banking, and BPAY. This is a voluntary code and virtually all banks, credit unions and building societies currently subscribe. The link to this code is: http://asic.gov.au/regulatory-resources/financial-services/epayments-code/.

Hopefully knowing the above will mean you can recover funds without having to seek legal advice.

Mistaken Payments: could you end up not retrieving your funds?

We have had one customer whose funds could not be retrieved because the bank account to which the mistaken payment was made did not contain sufficient funds. The wrong customer had swiftly used the money, despite notice of the mistake!

After exploring all options with the client, our final recommendation was to commence legal proceedings against the known customer who benefited from the mistaken payment. Provided the identity of the customer is known, this is something a Lawyer can help you with.

These cases highlight the importance of verifying bank account details before processing a payment. If a mistaken payment is made, act fast.

If you want to discuss any mistaken payments made or to discuss how to safeguard against this, please contact Su-Ann Loh at Lewis Holdway Lawyers on 03 9629 9629.