16 Jun Guest Blog – Get on Top of Late Payments – Debt is a Devil You Don’t Want to Dance With
“Get on Top of Late Payments – Debt is a Devil You Don’t Want to Dance With” – Celebrity tradie, James Bawden shares his true story and offers some advice…
Last year, celebrity tradie and TV presenter, James Bawden was on the brink of losing over $250k for work he carried out on a high-end shop fit-out in Melbourne. He was saved by Anthony Igra, a specialist debt collector who uses the little-known act, ‘The Security of Payment Act,’ designed to help construction contractors get paid what they are owed.
“I had spent almost a quarter of a million dollars of my own money in supplies and contractor’s wages on this state-of-the-art shop fit-out. We had worked really hard to deliver a stunning result but had not received any payment past the first two instalments and we were down to the bone,” said James.
Part of the reason James hadn’t chased the funds harder was because the client was a long-standing friend of his wife’s and so there was a history which gave a ‘trust factor’ that nearly became his undoing.
“Even after years of experience I allowed the personal relationship to get in the way, putting aside my normal protocols in managing the account, plus I didn’t even charge my normal rate. It’s something I would never do again,” he said.
James said that to further delay payments, the client requested a copy of every receipt, down to the last nail and screw. He said that because of the personal history, he had overlooked the normal processes he had in place recording every expenditure on a spreadsheet.
“I had to go back through a pile of receipts and itemise everything from the beginning. It was an excruciatingly painful and time-sapping process.”
After enlisting the help of two highly experienced lawyers, both whom successively failed to recover any of the money owed, James approached Anthony Igra who used the Security of Payment Act to put in an application to help recover the money.
“I handed everything onto Anthony and he sorted it all out. It is a very delicate process with specific date, times, formats and ways you must deliver the invoices. This also changes from state to state. The lawyer I tried to engage had no idea of these details and I could not have done it as a builder. It is a relatively quick process with the law designed to help a contractor’s cash flow. Within a few weeks I was paid in full plus my legal expenses. I didn’t have to deal with the client or waste time going to court.”
James said that the Security of Payment Act is something that most contractors know about and often include as a bi-line on their invoices but they don’t know how to use it.
“It’s a complicated process that involves a lot of paperwork and eye for detail. You really need to know how to follow their processes and procedures, which you need an expert for. It’s not like paying a lawyer – there is a one-off fixed fee quoted up front with no hidden extras. It’s very transparent and I would advise any trade contractor who is chasing down money to save themselves the time and headache and go through Anthony and his team to get what’s owed to you.”
James’s advice to any tradie owed money:
- Do your paperwork, even when the pressure is on.
- Always be honest so you will get paid when your customer has been dishonest.
- Don’t rely on being a nice guy. You can be a nice guy but you have to be a businessman first.
- Don’t be afraid or embarrassed to use the security of payments act. The law is written for builders’ and contractors’ protection even when your claim is against a big white-collar client.
- Debt is a devil you don’t want to dance with. Avoid it in the first place if you can and if you can’t, get expert help.
Contractors Debt Recovery specialises in recovering unpaid invoices for trade contractors in the commercial building industry. The company has recovered more than $62 million in unpaid payments since 2006. For further information, visit: www.contractorsdebtrecovery.com.au; call: 1300 669 075