Quick answer
Before responding to the debtor or instructing a collector, confirm that the right business is claiming from the right legal debtor for an amount that can be proved. Match the invoice to the accepted quote, purchase order or contract, then verify delivery or performance, the agreed due date, payments, credits, complaints and any set-off. An invoice generated by your accounting system is useful, but it does not by itself prove a contract or satisfactory performance.
How to use this guide
The first review should also identify the legal clock and the realistic forum. Establish when the debt became due, whether the debtor later acknowledged it, whether proceedings have already been served, and whether a special notice rule applies. Do not assume every commercial account prescribes after the same period or that sending another demand restarts prescription.
Confirm who owns the claim and who owes it
Use registered names and numbers rather than trading names alone. Check whether the supplier was a company, close corporation, partnership or sole proprietor when the work was done. On the debtor side, distinguish a company from its director, shareholder or employee; personal liability requires a legal basis such as a valid suretyship and cannot be inferred from someone negotiating on the company's behalf.
If the invoices were ceded, factored or assigned, record who now has authority to collect and give notice where required. A demand from the wrong claimant creates an avoidable defence. Where a group of companies is involved, connect each order, delivery and payment to the contracting entity instead of combining balances across entities for convenience.
Reconcile the amount line by line
Prepare a statement beginning with each valid invoice, followed by credit notes, returns, payments and authorised adjustments. Separate principal from interest, collection costs and legal fees. Claim interest only under a valid contractual term or a lawful default rule, and do not invent a current percentage or compound it without a proper basis.
Read the debtor's explanation beside the reconciliation. A complaint about incomplete work, defective goods, overbilling or agreed set-off changes the merits and may make aggressive collection counterproductive. Preserve the response even if you disagree; it helps a lawyer evaluate whether the debt is liquid, disputed or suitable for a simpler process.
Check the contract and performance evidence
Identify how agreement was reached and who had authority to approve it. Signed terms are helpful, but acceptance can also be shown through reliable electronic communications and conduct. Under the Electronic Communications and Transactions Act, electronic material is not excluded merely because it is digital; its origin, integrity and reliability still affect evidential weight.
Link every invoice line to proof of performance. Useful records may include delivery notes, completion certificates, timesheets, project approvals, access logs, correspondence accepting milestones and evidence that goods were not returned. Keep original-format emails and messages with their surrounding thread rather than isolated screenshots that remove dates or participants.
Test prescription, notices and forum
Build a chronology from contract formation through the due date, later acknowledgements, part-payments, demands and litigation. The Prescription Act has several periods, with a residual three-year period applying to many ordinary debts, but the correct period and start date depend on the claim. Express or tacit acknowledgement and service of qualifying process have specific statutory consequences that require fact-based advice.
Act 40 of 2002 does not apply merely because the customer is an organ of state. Its notice regime can become relevant where the claim is against a qualifying organ of state and falls within the Act's defined “debt”—a claim for payment of damages. Section 3 generally requires notice within six months after that debt became due, with condonation available in defined circumstances. Small Claims Court has special eligibility and demand rules; a juristic person may not institute a claim there, whereas a natural person trading as a sole proprietor requires a different analysis. Magistrates' court jurisdiction also depends on current monetary, territorial and claim-category rules, not the invoice total alone.
What to place in the decision file
- Company and debtor identity records linked to the actual contracting parties
- Contract, quote, purchase order, accepted terms and authority evidence
- Invoice ledger reconciled to credits, returns, payments and disputed items
- Delivery, milestone, completion or service-performance records
- Full debtor correspondence, including complaints and settlement proposals
- Chronology covering due dates, acknowledgements, demands and prior proceedings
- Interest, costs, suretyship, dispute-resolution and jurisdiction clauses
- Any material showing that a damages claim against an organ of state, Small Claims rule or other special process may apply
Questions to answer before the next response
- Can the business prove agreement, authority, performance and the net balance?
- Is the named debtor the contracting entity rather than a related person or company?
- What event made each amount due, and what later conduct affects prescription?
- Is the claim genuinely disputed, and what evidence supports each side?
- Which forum has jurisdiction under current rules and the contract?
- What interest or costs are legally recoverable rather than merely shown on a statement?
Important limitation
This is general South African information, not a conclusion that an invoice is enforceable or that a particular forum has jurisdiction. The contracting parties, performance, dispute, due date, prescription history and special statutory rules can change the route. Obtain advice before making admissions, threatening insolvency or allowing a live court deadline to pass.
FAQs
Is an invoice enough to prove the debt?
No. The business should also prove the parties, agreement, authority, performance, due date and net balance.
Does another demand restart prescription?
Not automatically. Prescription turns on the statute and facts, including due date, acknowledgements and qualifying service of process.
Can my company sue in Small Claims Court?
A juristic person may not institute a Small Claims Court claim. A natural person trading as a sole proprietor requires a separate assessment.
May I claim interest shown on my accounting system?
Only if the rate and calculation have a valid contractual or legal basis; software entries do not create the entitlement.
Related Lexuno paths
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Source notes
- Prescription Act 68 of 1969
- Magistrates’ Courts Act 32 of 1944
- Rules Regulating the Conduct of the Proceedings of the Magistrates’ Courts of South Africa
- Rules Board Government Gazette Notices
- Electronic Communications and Transactions Act 25 of 2002
- Prescribed Rate of Interest Act 55 of 1975
- Small Claims Courts Act 61 of 1984
- Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002
- Companies Act 71 of 2008
- General Law Amendment Act 50 of 1956
Legal note
This article is general legal information for South African readers. It is not legal advice. Speak to a qualified legal professional about your specific facts before taking action.