The Letter of Demand - first step in debt recovery

1. You’re a business or company who has provided goods or services to a customer;
2. You have rendered your invoice in accordance with the contract for providing the goods or services;
3. The customer has raised some issues in informal discussions regarding payment and for whatever reason is now refusing to pay for the goods or services.

 What can you do next?

 Provided that you have gone through the three stages set out above you are now in a position to send a letter of demand. The letter of demand is the first formal step in the debt recovery process. We can be of assistance to you in drafting such a letter or you can draft the letter on your own.

 The letter of demand should include the following:

1. The outstanding amount owed to you;
   Note: We would recommend enclosing a copy of any invoices that the outstanding amount relates to

2. A description of the goods or services provided by you, for which you have not been paid; Note: We would recommend enclosing a copy of the relevant contract as further evidence of what you have provided.

3. A payment deadline, this is usually 14 days.
   Note: In some circumstances a debtor may not be able to pay. Therefore we would recommend the deadline also include coming to a payment arrangement.

4. You may wish to incorporate additional correspondence supporting your demand;

5. You may wish to incorporate the consequences of not making payment or coming to a payment arrangement after the payment deadline, such as legal action.

If you have further questions, please contact us at frank@franklaw.com.au.

This is not legal advice.