Domestic Business Builder Policy Administration Guide - Overdue Accounts What must I do if an account is overdue for payment? At what point should I send a final demand? What information must I include in the final demand? What must I do if the buyer ignores the final demand? What should I do if the buyer offers payment after you have instructed your attorney? Who is responsible for payment of uncoverable legal costs? What is your attitude with regards to trade disputes? What must I do in the event of an insured buyer's liquidation, insolvency, judicial management etc? Must I refer offers of compromise to you? Can I continue making deliveries to a buyer who is overdue for payment? What must I do if a buyer asks for postponement of the original due date? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What must I do if an account is overdue for payment? You should carry out your own credit control collection procedures without any reference to us prior to sending out a final demand. At what point should I send a final demand? - Not later than 90 days after due date or any postponed due date, in respect of any amount owing on open account. You need not wait for the expiry of 90 days before sending the final demand - it can be sent at any time before the 90 days at your discretion. - Immediately you become aware of any dishonored cheque, bill or other negotiable instrument. What information must I include in the final demand? In order that the buyer becomes aware of our involvement, it is essential to incorporate a paragraph along the following lines in your final demand: Unless payment is received within 21 days from the date of this letter, we shall be obliged to report your default to Credit Guarantee Insurance Corporation of Africa Limited who, in turn, will advise the International Union of Credit Investment Insurers of your non-payment. Legal action will also be instituted against you without any further notice. What must I do if the buyer ignores the final demand? If the amount still remains unpaid after the date stipulated in the final demand, a copy of the final demand and proof of dispatch should be sent to Credit Guarantee together with a claim form. You should then institute legal proceedings against the buyer to obtain judgment. What should I do if the buyer offers payment after you have instructed your attorney? You may accept the payment without prejudice and with reservation of all your rights. Your attorney and Credit Guarantee must be advised of the payment received. Who is responsible for payment of un-coverable legal costs? All costs incurred prior to a judgment, being obtained are for your account. Any costs incurred after the execution of the judgment, will be shared on a pro rata basis according to our respective interests in the amount handed over for collection. What is your attitude with regards to trade disputes? We realise that disputes do occur in business, but you will appreciate that very often we do not have the technical knowledge needed to adjudicate on a trade dispute, particularly when it concerns the question of quality. For this reason, it remains your responsibility to obtain a judgment. in your favour before a claim will become due for payment. What must I do in the event of an insured buyer's liquidation, insolvency, judicial management etc? The moment you become aware of the order being granted against the buyer, immediately complete and send us a claim form (see link).  Click here to view the form (Sample) If the buyer has already been handed over to your attorney for collection of an overdue amount, you must immediately instruct the attorney to close his file. Send us copies of all circulars or other correspondence received from the liquidator or any other legal representative. Proceed to have your claim lodged and admitted to the insolvent estate, provided that there is no danger of any contribution being levied. If you have any doubt in this regard, please contact us before lodging a claim against the estate. Must I refer offers of compromise to you? Yes, all offers of compromise, whether formal or informal, must be referred to us before any acceptance or rejection. We shall then weigh up the merits of any offer and, in conjunction with you, decide upon its acceptability or otherwise. Can I continue making deliveries to a buyer who is overdue for payment? You may do this under the cover of your policy only if: the overdue amount is not more than 60 days overdue for payment (note that, in respect of certain buyers, the credit limit may reduce the 60 days to 30 days- special condition 152), and/or a cheque, bill or other negotiable instrument received from the buyer has not remained unpaid for more than 15 days, and/or you are not aware of any other information which would suggest that the buyer is in financial difficulties. If further deliveries are made under contrary circumstances, they will not be covered under your policy. What must I do if a buyer asks for postponement of the original due date? Provided that the request for an extension is received on or shortly before the original due date, you may grant a postponement of not more than 30 days without any reference to us. You are required to retain written proof of extensions granted. Any request for a postponement of more than 30 days must be referred to us for our written approval.
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