Today's business post is about the debt collection process in South Africa. The calendar's placeholder for this journal entry was "The invoice conversation I used to avoid". I have already written that one: it is the invoice I almost did not send, and writing it again would be a second draft of the same feeling. This entry is about one line I read this morning while the business post was being researched, because it applies to my own company.
The line
The Department of Justice publishes Guidelines for Commissioners and Clerks of the Small Claims Courts. On the question of who may bring a claim, it says: "in terms of section 7 of the Act, only a natural person may institute an action as plaintiff". The same guide defines a juristic person as a registered company or close corporation. A juristic person can be sued in the Small Claims Court and can counterclaim there. It cannot bring the claim.
NexBDM is a (Pty) Ltd. That makes it a juristic person.
Why that matters more than the new limit
The same Department page says the Small Claims Court limit went up by Government Gazette notice to R30 000 on 1 August 2026, from the R20 000 set in 2019. That is the news, and the business post covers it. But for my company the higher limit changes nothing, because the door it widens is not a door my company can use.
What it leaves is the Magistrates' Court, which in practice means an attorney, or a handover to a registered debt collector. Both are real routes. Neither is cheap or quick for an invoice of the size a small company usually waits on.
What that does to how I think about terms
If court is expensive, everything before court has to do the work. That is not a new idea, but reading the section 7 line made it concrete for me.
- The steps before the letter are the whole process for most invoices. The reminder dates, the conversation and the written payment arrangement are not politeness on the way to court. For a company my size, they are most of what collection is.
- The quote is the evidence. A letter of demand, and anything after it, rests on what was agreed and when. If the terms and the due date are only in an email thread, the file has to be rebuilt the day it is needed.
- A person decides when to escalate. A system can compute every date on the ladder the moment an invoice is created and draft a letter of demand with the facts filled in. The decision to send one is a judgement about a relationship, and it stays with a person.
The line I would give a client
Before you write your payment terms, check what your business is. If you trade as a sole proprietor, the Small Claims Court is a real option up to the statutory limit of R30 000. If you trade as a company, it is not, and your terms and your follow up have to carry the weight that a court would otherwise carry.
This is my reading of a public guide, not legal advice. For anything disputed, speak to an attorney.
Chat soon.