This is one of the most common concerns businesses have before referring an account, and it deserves a straight answer: referring a debt does not automatically damage a customer relationship — but how it is handled does matter.
The case for referring: Most customers who owe money know they owe it. A structured, professional letter of demand from a third party is often more effective at prompting a response than further contact from you — and it removes you personally from the awkward position of chasing a customer. Many debtors engage properly with a recovery firm in a way they would not with the original supplier, precisely because the dynamic is different.
The case for concern: Some business relationships — particularly long-standing ones or those with ongoing supply value — are worth more than the debt being recovered. In those cases, referring may send a signal you do not want to send. This is a judgment call only you can make.
How we handle it: Merion's contact is professional, factual and compliant with the ACCC and ASIC guideline. We do not use aggressive tactics, and we do not disclose sensitive commercial information unnecessarily. The approach is designed to produce a resolution, not to embarrass or alienate a debtor.
A practical middle ground: some clients refer debts after a defined period — say, 60 or 90 days overdue — as a standard policy. This takes the personal element out of it: it is not a decision made about a specific customer, it is a credit control policy applied uniformly. Customers often understand this framing better than an ad hoc referral.
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