As with other laws and sanctions, the 6-Year Invoice Rule under the Limitation Act comes with certain caveats you should be familiar with.
These monitions grant exceptions to the rule, where it becomes inapplicable. In such an instance, you may not be able to chase an invoice, and may have to declare bad debts.
One of the first things you’ll need to look out for is maintaining regular contact with your debtor.
What this essentially requires is following-up on the invoice with the client. When chasing an old debt, you must be able to prove that similar efforts have been made in the past before. This will work towards improving your credibility and strengthening your case.
Keep in mind that if no contact was made or established between the debtor and the creditor over the past 6 years, the debt can no longer be chased.
The more time that passes before a debt is chased, the easier it becomes for it to be disputed.
In such a case, there exists a possibility that the debtors argue that they never received the goods or service they are being charged for. They may even make a false claim of receiving them faulty or incomplete.
To prepare for such a possibility, make sure you have the relevant paperwork at hand. These can include delivery notes and confirmations- any official documents that back your position.
Finally, when deciding to chase a debt, even with a cooperative debtor, do not expect things to happen immediately. When years pass for an issued invoice being chased, changes amongst company systems and personnel can cause some delays.
Before you decide to report late invoices, allow your debtors some time to access their records and get back to you.