Su-Ann Loh is the Director of Dispute Resolution at Lewis Holdway Lawyers & lawyer to Kearley Lewis, mercantile agency.
In this interview, Su-Ann shares the issues that she most frequently comes across, as well as her tips on how to avoid having debt collection issues.
Su-Ann works across both organisations within the Lewis Holdway community, and therefore ensures that all files and processes are legally compliant and have oversight from a lawyer. If files ever need to be escalated to Su-Ann, she will already have had intimate knowledge of the file.
“It means as a mercantile agency, Kearley Lewis can provide clients with a full service, and they can have confidence that our legal team has oversight of the debt collection process, thereby maximising collection rates.”
Su-Ann has been working in the Lewis Holdway Community for 10 years this July.
So, what are the most common issues that come across Su-Ann’s desk?
The most common issue is that there are still many businesses who trade without having written terms and conditions. Su-Ann says:
“The easiest answer to this problem is to have a customised set of terms and conditions and a contract of trade drafted up for your business. I explain it to clients like this, it may cost a little bit to see the doctor for preventative care, but I can assure you that you will be grateful for that input early on, because you don’t have as much control of the situation when you’re on the operating table.
The difference in cost between having your terms and conditions drafted, versus the issue of collection, especially if it is an issue that is referred to a lawyer, is not insignificant.”
Su-Ann feels that service providers and the suppliers of non-tangible products, need her expertise more. Why is this?
“The service provided is not always quantifiable, and because of that, with our modern times we are seeing a new generation of consumers, who don’t necessarily see the value in the service being provided. Putting a paper trail in place crystallises the relationship and reinforces the value of the service you undertake.”
Are there any industries that you get frequently involved in and why?
“We have a range of industries that we work with frequently. Many of our clients are in the construction industry, recruitment, wholesalers across a number of industries and we also do an increasing amount of work with service suppliers.
Any business that sells on credit terms may have instances where the relationship doesn’t go smoothly, and this is where we can assist.”
What services do you offer that our readers may not know about?
“The service that a number of our larger clients utilise us for is having Kearley Lewis as an extension to their accounts receivable area. Each month they pass across their invoices that are past a certain age, and the team at Kearley Lewis then undertakes collections on their behalf. If a file does have to go to our legal team, we are in effect the client’s lawyers as we work so closely with Kearley Lewis, who in turn works closely with our clients.
This outsourcing is a cost-effective way for clients to have support for their collections and access to lawyers when they need them, rather than having these resources permanently in their business.”
So, what are Su-Ann’s top tips to avoid having debt collection issues?
- Have a really good internal debt collection process, and stick to your payment terms.
- Have clearly written terms of trade, which appear more than once in your paper trail (for example, on the back of your invoices as well as your credit application).
- Do credit checks on new clients, with permission. This can be undertaken through the Kearley Lewis website.
- If you don’t feel comfortable giving a particular client credit terms, consider taking part payment, ask for payment up front or cash on delivery.
- Know your customer & pay attention to WHO is paying the bills. Your debtor can change entities and it can affect you, without you even knowing it has occurred.
Some businesses may be reluctant to use Kearley Lewis’s services as they have a perception it could be expensive.
What would you say to businesses such as this?
“Perception is different to reality. Understand what is real by doing your research on the service offering of Kearley Lewis and, by all means, make a comparison with other mercantile agencies. Then measure this by undertaking a commercial cost benefit analysis and comparing the cost of signing up as a member of Kearley Lewis for one year, against the losses your business could stand to suffer if collection isn’t tightened. Those losses are not just referrable to the unpaid invoice, but also the time lost in rendering the service or the product and the internal cost of your collection. There is also the matter of reputational loss for your business in the industry and among it’s customer base.
I would also encourage businesses to speak with the General Manager of Kearley Lewis and get a sense of the file handler, who will ultimately manage your file for you; you will find that Kearley Lewis matches the file handler and their industry knowledge to relevant clients.
More often than not, the clients who have the most painful experience with debt collection are the ones who have left it too late or did not take precaution in their trading relationship with certain belligerent payers. My recommendation is not to let a one-off experience take away the benefit of having a mercantile agency like Kearley Lewis work alongside you in helping your business minimise its losses from bad debts.”