Managing debt recovery can be a challenging task, but understanding the process can help you take control and ensure the successful collection of unpaid debts. This guide provides essential information on how to effectively manage and recover debts from clients or businesses. Understanding Debt Recovery Debt recovery is the process of collecting unpaid debts from individuals or businesses. It involves various steps, from initial communication with the debtor to legal action if necessary. The aim is to tackle debts as soon as possible before they become unmanageable for both your business and the debtor. Steps to Take for Debt Recovery Assess Your Debt Situation: Begin by assessing your outstanding debts. Make a list of all the debts owed to your business, including the amount owed, the debtor, and the due dates. This will give you a clear picture of your receivables and help you prioritise which debts to address first. Communicate with Debtors: Open communication with your debtors is crucial. Contact them to discuss the outstanding debt and explore possible solutions. Early intervention is usually preferable to prevent problem debts from escalating to a level that impacts your business. Create a Recovery Plan: Develop a realistic debt recovery plan based on your business goals and financial situation. Prioritise high-value debts and allocate resources to recover these debts first. Stick to your plan and follow up consistently to ensure timely recovery. Seek Professional Advice: If you're struggling to recover debts, consider seeking professional advice. Debt recovery agencies and legal professionals can provide valuable guidance and help you create a tailored debt recovery plan. They can also negotiate with debtors on your behalf. Explore Legal Options: Legal action can help recover the owed amount, but it's important to seek legal advice before proceeding to minimise the chances of spending time and money pursuing unrecoverable debts. Debt recovery can be tough, but with the right steps, you can take control of your receivables. Assess your debt situation, communicate with debtors, create a recovery plan, and seek professional advice if needed. For more information, you can also check out the Government's debt management website: https://debtmanagement.treasury.govt.nz/

Charities play a crucial role in making a positive impact in our communities, and the laws that govern them shape how effectively they can operate. If you are involved with a charity, it's important to stay informed about recent changes in the law. The ‘rulebook’ has been updated. The Charities Act 2005 (the Act) is the primary legislation that regulates how charities function in New Zealand. To maintain charitable status, officers of a charity must ensure compliance with the Act not only at the time of registration but continuously, including adhering to any changes in the law. The Act has been amended by the Charities Amendment Act 2023, which came into force in July last year, with further changes which took effect in July 2024. Here are some key updates: Expanded definition of officer Officers of a charity are responsible for ensuring the charity's purpose is fulfilled and its obligations are met. The definition of who qualifies as an officer has been broadened to include: Anyone (including a corporate body) in a position within the charity who can significantly influence major decisions. This applies regardless of the type of entity (e.g., trust, company, society) and the individual's title. The focus is on their influence, not their title. Officers now include trustees, members of the governing body, and roles like CEO, CFO, and general manager if they have substantial influence. Additional disqualification criteria now include convictions related to financing terrorism. The minimum age for officers has been lowered to 16, provided at least one officer is 18 or older. Governance review requirement Charities must now review their governance procedures at least every three years. This review should assess whether the deed, constitution, or rules are fit for purpose, help achieve the charity's goals, and comply with the Act. Key questions to consider include: Is the charitable purpose clear and still relevant? Are the current activities aligned with the purpose? Do the rules need updating to meet changing needs? Are conflicts of interest being managed appropriately? The review process is self-driven and can vary for each charity, but it must be documented.  Consequences of serious wrongdoing Previously, serious wrongdoing by a charity or its officers led to deregistration. Now, the Charities Registration Board can disqualify the relevant officer without deregistering the charity. The definition of serious wrongdoing has been narrowed to include only offences punishable by imprisonment for two years or more, but still covers unlawful or corrupt use of funds and grossly negligent actions. Reporting and accounting standards Reporting requirements have been streamlined for very small charities, while larger charities face more rigorous obligations. All charities must file an annual return with Charities Services, including financial statements prepared according to generally accepted accounting practice. The External Reporting Board (XRB) sets these standards. Tier 4 charities (annual expenses under $140,000) can use cash-based accounting. Tier 3 charities (annual expenses between $140,000 and $2,000,000) use accrual-based accounting. Larger charities (expenses over $2 million) continue to follow existing standards. Changes effective from 5 July 2024 Further amendments came into effect on 5 July 2024, which aimed to streamline the appeals process, making it more accessible and less costly for charities to challenge decisions by the Charities Registration Board: Charities can appeal to the Taxation Review Authority before the High Court and can self-represent to save on legal costs. The scope of appealable decisions will expand to include significant decisions by Charities Services. The timeframe for lodging an appeal will extend to two months. Representatives of a charity can appear in person to speak to the Board on appeals. Staying informed about these changes is essential for ensuring your charity remains compliant and continues to make a positive impact in the community. If you have any questions or need assistance, consider seeking professional advice to navigate these updates effectively.