Some large enterprises might behave in what seem like selfish ways when it comes to paying what they see as unimportant bills for projects completed or goods that have been delivered by a much smaller firm. For the small firm the amount outstanding might represent a significant amount of revenue and any delay can seriously affect their cash flow position. In situations like these the small firm might have to resort to Debt collection processes, which they might already have in place, especially if they have found themselves in these situations previously. For those small enterprises that are facing this situation for the first time, the next action might well ask questions, like “Who am I going to call?” Well possibly the Ghostbusters might present a daunting sight at the reception desk of the large firm, but possibly they aren’t the best team for Debt collection, as that’s physical rather than metaphysical .
The choice of what to do next might depend on the liquidity of the small firm, as charges for a solicitor who specialises in Debt collection, or a specialist Debt collection agency might be high, when compared to evaluating Debt collection software as a procedure of addressing the issue themselves. Debt collection software might be well worth thinking about for the small enterprises who have been through Debt collection previously, as perhaps way of doing it, since the solicitor or Debt collection agency would get paid for each Debt collection they performed, whereas the Debt collection software is a one-off purchase, which is reusable for any future Debt collection.
It would be so important for a small firm tackling Debt collection for the first time to be careful in choosing the most appropriate Debt collection software package, since the Debt collection letters that will be generated need to look professional both in appearance and in wording so as to both show the large firm that the small firm knows what it is doing, and also to keep the relationship on a professional level.
In order to help with these requirements it is best to choose a Debt collection software package that includes either; templates of ready made Debt collection letters and/or full instructions with examples of how to best write Debt collection letters. These examples or templates should include references to the “Late Payment of Commercial Debts (Interest) Act 2002”, which was brought in to try and prevent large enterprises from taking advantage of their position and power to withhold payment to small enterprises until they were ready.
It might be that the small firm was set up with good advice, possibly from Business Link and so it might be that the contract with the large firm was written to include a late payment penalty clause, so in these cases the Debt collection software should enable the user to replace references to the act with references to the clause in the contract in the Debt collection letters that are sent out.
In case the Debt collection fails to produce results, the small firm might then need to take the matter further and look to taking the large firm to court, or even just consulting a solicitor for that step, the small firm will need to show evidence of what they have done so far. The Debt collection software should store copies of the Debt collection letters that were sent out, and also copies of any letters or documents received, all with date stamps.
So why not give Debt collection software a try, it will be cheaper and might work first time.
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