Chances are most of your customers will pay you within a reasonable amount of time. But sooner or later you will have to deal with one who pays very slowly or not at all. It’s to protect smaller companies from this type of disaster that Sunette Leonard, MD of LegalSense, established her company in 2006. Here she provides some pointers on ways to safeguard your business from non-payers.
Why did you establish Legal Sense?
One of the main causes of business failure is the absence of legal support. Companies need to have an affordable way to take care of their day-to-day legal requirements. For any business to work properly and be protected, it needs expert input on issues like debt collection, contracts with customers and suppliers, and service level contracts.
How can small and medium businesses protect themselves?
All businesses should have contracts drawn up by an attorney that include provisions about what happens when payments are not made and other contractual obligations are not met. Also, look at your payment policies and don’t let clients get into a situation where they owe you a fortune. Ask for deposits before you begin the work, or even full payment in advance depending on the project. Obtain expense retainers upfront. Bill incrementally thereafter so that you don’t use up valuable business resources without receiving payment along the way.
What does Legal Sense provide?
We offer an insurance product that is already well established in the UK, Europe and the US, but is the first of its kind available in South Africa.
Legal Sense aids businesses in the following circumstances: debtors do not pay and legal action needs to be taken against them; suppliers do not provide the correct services or goods; a business partnership or trading relationship goes sour and matters need to be settled; or a customer does not pay for your services or products and it is too expensive, or you do not have the legal expertise at hand, to recover the money owed. Many other legal services are also on offer. In the first 90 days you get access to Legal Sense’s internal legal team. For incidents that occur after that, the cost of external lawyers is also covered.
What does it cost?
Legal Sense provides legal protection for businesses and a 24-hour business lawyer from R250 per month, depending on the number of employees in the company. In effect, this means your business receives R250 000 worth of legal work completed for it, per year, for a very reasonable fee. Also, cover is provided on a month-to-month basis, so you are not tied into any extensive contracts.
What is covered?
Legal Sense’s Business Legal Cover policycovers legal costs and expenses, professional legal representation as well as a 24-hour telephonic legal advisory service. Telephonic legal advice is free and does not fall under the R250 000 limit per year.
Legal Sense has several industries listed on its website, along with an overview of the types of issues that may affect each sector, so whatever industry you’re in, whether you have an estate agency, a panel beating shop, an IT company, a guesthouse, or a transport business, visit the website and find out more about how you can protect your interests.
Contact: 0861 LSENSE (0861 573 673), www.legalsense.co.za