Standard Domestic Cover 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 further action must we take? What should I do if the buyer offers payment after you have instructed your attorney? May I instruct my own attorney to take legal action against a defaulting buyer? What happens after we have instructed our attorneys? 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 as you become aware of any dishonoured 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 that a paragraph along the following lines is incorporated in your final demand: “Unless payment is received within a period of ten days from date hereof, we shall be obliged to report your default to Credit Guarantee in terms of our credit insurance policy. Legal action will then be instituted against you without any further notice.’’ Since a copy of your final demand will form the basis of our instructions to our attorneys should legal action be necessary, it is important that the demand includes the following: Your correct name and physical address, so it would be advisable to use your letterhead for the final demand. The full name of the buyer in order to establish the correct legal entity (company, close corporation, partnership etc) as well as the buyer's physical address. Details of the outstanding amount showing, for each month of delivery, the total amount invoiced and the due date for payment. 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, you must complete a claim form (see link) and send this to us (together with a copy of the final demand) within ten days after expiry of the final demand period.  Click here to view the form (Sample) What further action must we take? Nothing at this stage. You will be informed once we have instructed an attorney or a collection agent to proceed. We will also give you a claims reference number which you must quote in all correspondence referring to this collection. Naturally, we shall keep you informed of the progress made by the collection agent or attorney What should I do if the buyer offers payment after you have instructed your attorney? You must not accept any payment as this could prejudice the recovery of any legal costs already incurred. Instead, the buyer should be referred either to us or, preferably, to the attorney or collection agent concerned. action. May I instruct my own attorney to take legal action against a defaulting buyer? Normally all legal proceedings shall be conducted by our nominated collection agent attorney and counsel (refer Proviso 15). You may use your own attorney only if Credit Guarantee has given its consent in writing and your policy has been endorsed to this effect. What happens after we have instructed our attorneys? You must, within ten days of the instruction, complete and send to us a claim form and attach a copy of the relevant final demand. You must also keep us informed of the progress made with the legal action instituted, preferably by sending us copies of all correspondence between you and your attorney. 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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