One of the most common questions businesses ask about an old invoice is simply: can I still recover this? The answer often turns on a concept called the limitation period.
What a limitation period is
A limitation period is the window of time within which legal proceedings to recover a debt can generally be commenced. In most Australian states, the limitation period for a simple contract debt is six years, though the detail varies by state and by the type of debt.
Why it matters for your accounts
The practical takeaway is straightforward: the age of an account affects your options. An account that is comfortably within time has the full range of recovery and escalation paths available. An account approaching the end of its limitation period has fewer, and a much narrower margin for delay.
The lesson is timing
This is the strongest argument for referring an ageing account sooner rather than later. Recovery rates fall as accounts age, and the legal options narrow as well. Waiting rarely improves an outcome.
This article is general information, not legal advice. Limitation law varies by state and circumstance — obtain advice specific to your situation before relying on it.
If you have older accounts you are unsure about, talk to Merion — we will give you a clear view of where they stand.