Recently I met with a client, Paul in South Perth WA to discuss the PPSA legislation. Paul was particularly interested in being able to have “secured creditor†status and not be liable for preferential clawback by the liquidators.
During our conversation Paul stated that we were responsible for saving him approximately $20,000 dollars. “How?†I asked.
Paul explained that he had a potential customer that would not sign his credit application but who told him he had plenty of money and not to worry about getting paid. “No signing, No work done†insisted Paul. Well he didn't get the job, but within two months that “Customer†had gone into liquidation and the losses to Paul would have been around $20,000.
Lessons to be learned
- If a potential customer won't sign your credit application then don't extend credit
- A “Customer†who doesn't pay is not a customer, but a liability
- Have EC Credit Control working for you after all its “Because you work hard for your moneyâ€