When businesses enter into service agreements without conducting proper due diligence or strengthening their contract terms, they expose themselves to unnecessary financial risks. A recent case involving a UK-based software development company illustrates exactly why preventative measures like those offered by VendSafe Global are vital for protecting your business from late payments and client disputes.
The Cost of Missing Early Risk Checks
Throughout 2022, a UK-based software development company provided bespoke services to a Singapore-based software holdings firm. Despite the existence of a contract stipulating payment within 30 days, the client repeatedly failed to pay six separate invoices. After months of unanswered reminders, the frustrated software company turned to Payfor Global for help with debt recovery.
At the point of escalation, the unpaid balance stood at $32,257.11—a significant sum for any business to have locked up in dispute. Had robust due diligence been conducted at the outset, potential warning signs such as cash flow issues or unstable company operations may have been detected, allowing the company to either rethink the partnership or fortify their contract terms accordingly.
Disputes, Delays, and Rising Costs
When Payfor first contacted the Singapore-based debtor, they were met with inconsistent statements and attempts to confuse the situation. The debtor falsely claimed that a partial settlement had been reached and paid—yet on closer inspection, no payment had ever materialised within the agreed timeframe.
Due to the absence of a strong pause-work clause or pre-agreed late payment penalties, the process of enforcing payment became lengthy and complex. Only after recalculating the outstanding balance to $36,676.09—including contractual interest—and escalating matters with legal threats did the debtor eventually settle the amount, months after it was originally due.
This unnecessary delay in payment could have been avoided if the original agreement had included stronger, enforceable contract terms—a service VendSafe Global provides as part of our Contract Protection & Negotiation offering.
Why Prevention Is Always Better Than Cure
While the client was ultimately able to recover the funds without formal court action, the time, stress, and resources spent chasing the debt were entirely preventable. Had VendSafe Global’s services been engaged before signing the deal, the UK software company could have avoided the entire dispute.
Through our Pre-Sales Due Diligence, we would have verified the financial health of the Singapore-based firm, flagging any concerns early. Our Contract Protection & Negotiation services would have optimised the service agreement with enforceable late payment penalties and pause-work clauses, ensuring the vendor retained leverage the moment issues arose. And, with our Accounts Receivable Management, persistent reminders and early escalation could have pushed for quicker payment, minimising the disruption to the business’s cash flow.
Secure Your Business Deals with VendSafe Global
At VendSafe Global, we believe that preventing bad debt is far better than chasing it. Our Due Diligence, Contract Protection, and Accounts Receivable Management services are designed to keep you in control of your cash flow from the moment a deal is signed.
Don’t wait for a problem to arise—partner with VendSafe Global today and protect your business before risks turn into losses. Contact us to book your due diligence check, contract review, or accounts receivable management consultation.
