Another week and EC Credit Control have had several meetings with a variety of trade's across the Campbelltown, Ingleburn, Picton, Camden & Liverpool areas of South Western Sydney. The stories are almost always the same – a small business community in South Western Sydney that believe Terms & Conditions of Trade can be copied from similar businesses in the same industry group. Rarely are they any good, in most they leave the business totally exposed.
Terms & Conditions of Trade is as important to your business as your industry licence or your ABN. We saw businesses in each of the Campbelltown, Ingleburn, Picton, Camden & Liverpool area's that in some cases had been trading for more than 7 years with little or in some instances no Terms & Conditions of Trade. The good news is that they have survived and are still in business. The bad news is that in most cases they have lost out on hard earned profit to various degrees.
In one case a local earthmoving company in Ingleburn doing wet hire, had lost over $30,000 in bad debts over the past year. They have managed to survive but realise that it's cost their business much more to recover that $30K loss, more like $90K to replace what's been lost on one or two job's. More importantly, they now realized that they have been exposed to potentially losing their capital equipment and or stock left on secured sites in certain circumstances, by not having proper Terms & Conditions of Trade in place.
How many hits like that can your own business afford to withstand?
If you are in business for even a short time you can suffer the experience of a bad debt. Most businesses incur at least one bad debt, if not many more. Successful debt recovery is not beyond you, it depends on your actions and priorities. The Campbelltown, Ingleburn, Picton, Camden, & Liverpool areas are all experiencing major growth, and along with that a higher risk of doing business on credit terms. Having watertight Terms & Conditions of Trade in place and a good Debt recovery process to follow is the key.