Cash flow is essential for business continuity but this is even
more critical amidst COVID-19 and its associated impact on the
global economy. Creditors, and particularly those in the hardest
hit sectors, such as aviation, construction, hospitality and retail
need to consider when and how to approach debtors for outstanding
payments. We therefore summarise below some 'top tips' for
debt recovery, which should assist creditors in maximising their
prospects of recovering overdue payments and avoiding protracted
litigation.
Pre-litigation
Contractual notices
Most contracts set out how notices for outstanding payments
should be issued. Creditors should ensure they are familiar with
these contractual provisions and serve debt notices as soon as
possible. In some standard form contracts, such as FIDIC and NEC,
notices must be issued within a stipulated amount of time. In any
event, the notice should set out the key contractual payment terms,
total amount due and
