When a small firm has submitted their bill for jobs done or products supplied to a larger firm and then discover that it has not been closed after the agreed last settlement date, they could wonder if there is anything in the legislation that can help them. For business debts such as this, there is the “Late Payment of Commercial Debts (Interest) Act 2002”, which sets out one off payments and daily interest that the small firm can charge on the unsettled debt. This legislation is only applied when the contract, agreed between both companies, does not include a late settlement clause, if it does, then the legislation cannot be applied as well. The small firm has the option of making the charges or not however the large firm cannot opt out of the late payment legislation.
If the small firm wishes to keep working or supplying products to the large firm then before making any charges they should inform the large firm what they are proposing to do. In addition it is better to send a revised bill showing the charges being made so that it is clear what is being charged for. If applying[/spin] the legislation does not prompt settlement by the large firm then the small firm could see it as appropriate to begin Debt collection proceedings. This can be done by several ways; a Debt collection organisation, which has talent in commercial Debt collection, or a lawyer with similar knowledge, or even to obtain of a Debt collection software package and keep the Debt collection operation to themselves.
Taking on the Debt collection operation themselves can not only save money, but also enable the small firm to control the Debt collection operation. To allow them to do this professionally the Debt collection software should include a set of instructions which explains the Debt collection operation in detail and most importantly, how to generate convincing Debt collection letters. The small firm will also need to allow for sufficient resources if this method is to work and so competent employees should be picked, perhaps two or more so that there is coverage in the event or holidays, sickness or other absence. Computer literacy would be a key requirement and also a good standard of English in order to generate good quality Debt collection letters. The Debt collection software should be able to direct the user along the Debt collection operation and show them how to generate Debt collection letters suitable for different levels of the operation. A good way of doing this would be to supply a suite of samples of Debt collection letters so that the user has a starting point from which they can customise the live Debt collection letters to suit the large firm details, which will be essential if the Debt collection letters are to be taken seriously.
A really good benefit of Debt collection software is that once obtained it can be reused for any debts that come up in the future and the small firm only has to pay for printer consumables, stationery and postal costs. It the small firm was to use a lawyer or Debt collection organisation then they could well be required to pay 10% or more of the debt for the service, but this would be charged for any future debts as well, so making these rather expensive options.
RSS FEED
