How to resolve business cash flow disputes

“This article has been produced by an independent contributor and does not reflect the views and opinions of the Immediation team or the brand as a whole.”

Getting help with dispute resolution

In most cases, settling your dispute through online mediation will be the most cost-effective and efficient way to resolve the issue. In fact, Immediation has deduced the ability to cut costs for commercial cases by as much as 98%.

Online mediation is a digital form of traditional mediation, offering state of the art technology as a legal solution. Taking away all the inconveniences such as schedule conflicts, logistics and travel, along with the inferences involved in physical confrontation, online mediation is a smart solution for business cash flow disputes.

With Immediation, there is a quick turnaround time of 30 days, which is impossible in traditional litigation. Get in touch with the Immediation team to learn more about how we can help you resolve your dispute.

Contemplate using a debt collection agency

If you aren’t able to get the business to make payment despite your friendly reminders, informal negotiations, and letter of demand, it may be time to engage a debt collection service.

Before doing so, inform the business of your intention to do this as it may prompt them to pay the debt. Read more about collecting debt as a collector and creditor on the ACCC website.

Review the terms of the contract

If there is a written contract in place, it’s time to read it carefully. If prepared professionally, there will be a section on payment conditions, payment terms, and debt recovery options. It may be possible that the payment terms specify that payment is to take place within a set time period upon completion of the service and that timeframe has not lapsed yet. This just means that you will have to wait until you get paid within the time period or the states timeframe over before you can take any action.

If you have an oral agreement or part of and part written agreement, know that this is just as valid as a written contract – so long that there is proof of the terms of agreement.

If you have difficulty understanding the legal terms of a contract, it is advised that you get help from a legal professional.

Send them a reminder

Missed payments are relatively common and could be just a matter of oversight. Get in touch with the business by phone, email, letter, or in person and remind them of the payment owed.

In the discussion, set a payment date and negotiate a payment schedule. Here are some good debt recovery templates published by Business Victoria.

Always put it in writing

When it comes to creating an evidential trail setting out all of your attempts in recovering the debt owed, it is always important to have your attempts recorded in writing.

Sending a letter of demand should be the next thing to consider if the business ignores your reminders. When contacting businesses about debt, know that you have to comply with legal and consumer law obligations issued by the Australian Competition & Consumer Commission (ACCC).

In the event the business is responding to you positively, but has yet to send payment, you should consider alternative dispute resolution.

Take legal action

If nothing else has worked, including online mediation, you may want to take legal action. Depending on how much money is involved, you may be able to lodge a claim at the small claims tribunal, or seek legal advice to bring a case to court.

In Summary

In most cases, being polite and professional about the matter can help the business understand your position and clarify any misunderstandings.

Unfortunately, not all cases are as easy as a polite request for the payment of money owed. Where you have tried your best to communicate the business cash flow dispute to no avail, the aforementioned steps will help you in recovering the money owed to you.