Cash flow is a crucial element to the growth and stability of a business. It is important to ensure that you have access to such cash when you need it. Often, this cannot occur for some businesses because of existing debtors. Here are some tips to manage your debtors:


Ensuring your invoices have the correct details is extremely important. By this, we mean that it contains the correct contact details for your customers. This can include:

  1. A contact name;
  2. The correct address for the customer;
  3. If works is being performed at a property or site, it doesn’t hurt to include this as well; and
  4. If your customer is a company or business, include the Australian Company Number (ACN) or Australian Business Number (ABN).


You want to be on the front foot with issuing your tax invoices. If you can send this to your customer on the same day you sell your product or provide your services, or at an absolute minimum within the same week. If your payment terms are 14 days, this could mean the difference between clients paying someone else’s invoice before yours.

Payment Options

Have a payment process that is easy for your clients to use. Take advantage of technology systems that are available to ensure an efficient way in which payment of your invoices can be attended to and finalised.


If a customer disputes your invoice, ask them to specify if it is certain parts or the entire invoice. If it is parts of the invoice ask them to pay the non-disputed amounts, that way you are receiving some form of cash flow whilst you negotiate on the disputed aspects of the invoice.


Be proactive about chasing your debtors and pick up the telephone. Do not be afraid to ask for payment and if a payment arrangement has been entered into make sure that you are monitoring it closely and contact your client immediately if the arrangement has not been kept.

Further Action

Be prepared to take further action for non-payment. This could be referring your customer onto senior management within your business or onto a solicitor who can assist with recovering the debt. The sooner you take such steps the easier it is to recover your money.

Review Terms

Ensure that a solicitor has reviewed your contracts so that they are legally compliant, as this will eliminate obstructions to the debt recovery process.

If you have any questions in relation to how to manage your debtors or reviewing your terms please contact one of our experienced team members at Southern Waters Legal on 9523 5535.

In this age of technology, money is being transferred electronically on a daily basis.  We pay our bills, we transfer money to our friends for dinner and we help out our family.  More and more, this is happening by way of electronic funds transfer.

Most of us are incredibly diligent in double and triple checking that we are sending money to the right account, however we are also human, and accidents happen.  So what happens if your fingers slip and you transfer money to the wrong account?

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Australians are known to love property as an investment vehicle. Generally this has been achieved by borrowing from a bank to purchase property before paying it off over time. Since 2007 self managed superannuation funds (SMSF) have been allowed to borrow money to acquire property, which has seen a large increase in the amount of SMSFs and the amount of property owned by SMSFs.

What is a SMSF?

A SMSF is a superannuation fund that has four (4) or fewer members and is an alternative to retail and employer sponsored superannuation funds. In a SMSF, the members (who are subject to strict rules) have control over the superannuation fund, its investments and decisions.

What are the benefits of an SMSF?

  • Investment control and opportunities – members have flexibility and control over the SMSF’s investments
  • Favorable tax concessions – a SMSF is one of the most tax-effective ways to hold investments.
  • Estate Planning opportunities – Upon death a member’s superannuation benefit is not covered by their Will and a correctly structured SMSF Trust Deed can allow the member’s superannuation to be paid to the right person in a tax effective manner.
  • Borrowing opportunities – laws allowing SMSF’s to borrow provide an avenue for members to acquire property and/or other types of property (for example shares) in their SMSF.
  • Unlock cash in business premises – a SMSF can purchase commercial property that a member may own personally which in turn unlocks cash that can then be personally re-invested.

Tell me more about unlocking cash in my business premises.

If your SMSF buys the property from you using money contributed to the SMSF, then you can use the cash received from the sale for your personal circumstances now! The property moves into your SMSF and the money moves out. Cash in the SMSF is unlocked!

Are stamp duty concessions available?

Yes, commercial property in your own name which is transferred to your SMSF may receive substantial stamp duty concessions. This strategy could save you thousands of dollars in stamp duty!

Can I buy residential property in a SMSF?

Yes, but strict rules apply and failing to comply with the strict rules can have serious consequences.

There may be capital gains tax concessions too?

Yes, tax concessions may apply depending on when the property is sold and for how much. Obtain proper advice before you act.

How does borrowing in a SMSF work?

The loan must be a limited recourse borrowing arrangement, which simply means that in the event of default under the loan the lender only has recourse to the property, not other assets of the SMSF.

How to avoid problems when buying property in a SMSF?

Seek appropriate advice from qualified professionals. Consult with Southern Waters Legal and an accountant or financial planner who are familiar with SMSF borrowing.

Want to know more about borrowing in an SMSF or transferring property to your SMSF? Please contact Southern Waters Legal on (02) 9523 5535.

Debt disputes arise in both personal and business relationships and can cause a great deal of stress. Here are some simple steps you can take to recover your money:

1. Check the details

The first step is to review all the information you need to start the debt recovery process.

You should confirm who the invoice is made out to, and who issued the invoice. This will allow you to determine who you need to chase for the debt (the debtor) and who the money is actually owed to (the creditor).

You should then establish exactly what goods or services you provided to the debtor and how much the debtor owes you for these goods and services.

2. Contact the debtor

You should to try and communicate with the debtor directly. This can be via email or telephone, however in our experience it is more effective to try and communicate via telephone as an email can simply be ignored.

You should try to get to the bottom of why they are not paying you. Is it because the goods you’ve supplied are wrong? Or perhaps they are unhappy with the services you have provided? If the debtor is having cash-flow problems, you could try suggesting a payment plan whereby the debt is broken down into smaller monthly payments.

Finding out the reasons for non-payment can assist you to reach a resolution or compromise.

3. Send a Letter of Demand

If the debtor is not responding or they have made promises that they will pay but have failed to do so, you can send a formal letter demanding payment of the debt.

It can help to have a lawyer write this for you, but if you decide to prepare a letter of demand yourself, remember to include the following details:

A.  The full amount of the debt
B.  Copies of any invoices or any agreement that you rely upon to prove the debt is owing
C.  A time limit for which they have to pay (i.e. 7 days, 14 days)
D.  Instructions as to how payment should be made (i.e. EFT, cheque)
E.  A warning that if payment is not made you will be referring the matter to your lawyers for debt recovery

4. Contact the debtor again

Depending on the debt amount, you may want to contact the debtor again via telephone to ensure they have received the letter of demand and find out if they are going to make payment.

5. Contact your lawyer

If you have not come to a resolution, have not been paid and are fed up with the situation, now would be the right time to engage a lawyer to start the debt recovery process for you.

In our experience, a debtor is more inclined to respond to a letter of demand that has been sent by a reputable law firm.

Before you engage a law firm, you should consider the following:

A. Make sure your invoices are correct

A correct invoice should include a proper ABN for the debtor, details of the goods and/or services provided, issue date of the invoice, as well as the date the invoice is due to be paid. If an invoice has been issued to an individual or business that is wrongly described/identified on the invoice (i.e. incorrect name or ABN), it is unlikely that you will be able to rely upon the invoice to enforce the debt. Please take care when creating your invoices to ensure you have the correct details.

B. Keep in mind the limitation periods to enforce a debt

You are only able to take action against a debt owed to you within a period of six years from the payment due date of the original invoice. For example, if your invoice is payable within 14 days after issuing to the debtor, the date is 6 years after the expiry of those 14 days.

If you leave a debt uncollected for more than six years it will then become what is known as “statute barred” and you will be unable to enforce the same.

C. Make sure your agreements have been signed correctly

If you are relying on an agreement that proves a debt is owed to you, you need to ensure that the agreement has been signed correctly. If the debtor is an individual, you should always have someone witness his or her signature. If the debtor is a corporation, you should make sure two directors or the sole director/sole secretary signs any agreement.

6. Next steps

If you have a questions regarding moneys owed to you, or if you would prefer an expert to handle your situation, please call us on  (02) 9523 5535.

1. Look after your future self

Superannuation is a way to save for your retirement. When you are a Contractor or Self-Employed, Superannuation is essentially your own obligation. There is no employer squirrelling away your 9.5% for you every pay run. Treat yourself as an employee and put Super away each year to ensure you can live comfortably in retirement.

2. Know the tax advantages

Income derived from your Super is taxed at 15%. Income you earn that is put into Super (up to certain contribution limits) is taxed at 15%. Putting money into Super can be very advantageous from a tax point of view. Further, if you own your own business there are very generous tax exemptions that may apply when you sell your business and put the proceeds towards Superannuation. Make sure you are aware of these when planning for the sale of your business.

3. Consider a Self-Managed Superannuation Fund (SMSF)

A SMSF is a Super fund where you get to choose how your retirement funds are invested. With most public funds usually invested in a mixture of shares (domestic and international), cash and retail property trusts, it is often the case that you may not have any idea where your retirement savings (Super) are invested. If you create a Self-Managed Super Fund you can decide where you would like your retirement savings to be invested, including purchasing properties that you choose and that will provide your SMSF with rental income.

4. Consider property as an investment

SMSFs can purchase property. A SMSF can hold residential or commercial property. It’s important to note that you can’t buy a residential property to live in, or for any family member to live in.

A great strategy is for an SMSF to buy a commercial property to lease back through their business. The benefit of this is that you are essentially paying rent to your future self.

You are able (subject to very specific requirements) to borrow money to purchase a property through your SMSF. There are also stamp duty concessions for transfers of commercial property you currently own into your SMSF.

5. Know your limits

For the financial year 2014/2015 – the maximum Concessional contribution (essentially pre tax) is $30,000 and if you are aged 49 or over on 30 June, or if you are aged 59 or over on 30 June 2013, the maximum contribution is $35,000.   The maximum non-concessional contribution (essentially post tax) is $180,000, but you have the ability to contribute 3 years in one go, if you would like.

Don’t leave it until the last minute of a financial year to make contributions. Allow sufficient time for payments to be processed by your fund.

6. Integrate your Superannuation into your business planning

Business planning should be an integral part of your business. By understanding both your private and business goals, you can then develop an action plan, which focuses on achieving these goals. It will also help minimise any risks you may have with your business and the undue stress related to such risks later on.

By thinking about your Superannuation and integrating it within your business planning, you will ensure that you have some form of asset/income once you retire.

If you would like any advice on setting up a SMSF or planning for your future, call Simon Bennett on (02) 9523 5535.