A written acknowledgement of debt is an important document. It confirms a debtor’s indebtedness and also provides for repayment terms. If the creditor subsequently needs to institute legal proceedings, this document will be critical.
One of the important ways of securing a debt owed by a business is to obtain a cession of book debts. In essence what this means is that the creditor can look to the debtors (customers) of the indebted party as security for the amount owed from time to time. It is however important to ensure that the contracts between the customer and its debtors don’t restrict cessions.