When a small company has done jobs for larger businesses and one or more has defaulted on the latest bills, the costs of pursuing this via solicitors skilled in Debt collection or Debt collection organisations can be high in comparison to the reserves available to the small company. In these times the small company could take into consideration an internal strategy where the purchase of Debt collection software can be a fraction of the solicitor or Debt collection company costs and so be an attractive strategy. They will need to evaluate what is for sale on the market for a suitable package that contains as many useful options as possible for a economical price, nothing unusual there then.

Before taking this route, the small company needs to really firstly check the contract for a late payment section and take into consideration following up on that. Without such a section the “Late Payment of Commercial Debts (Interest) Act 2002” states the late payment date as 30 days after the account is received for work done, or after the supply of items. If the account is still uncleared after this date the legislation allows the small company to charge daily interest on the outstanding debt and also make a fixed one off charge to cover the costs of the Debt collection work. The small company needs to in any event get hold of the large company and find out why the account has not been paid as this can on occasion prove useful if there is a simple explanation. It also shows the large company that the small company has an ethical and professional outlook to business and does not use a shoot first ask questions later approach to payment problems.

If the payment difficulty can be sorted out from the communication, then that ought to be sufficient and there will be no need for Debt collection to be instigated. However if this does not solve the difficulty and the small company feels it has been unfairly treated, they could well feel obliged to begin Debt collection proceedings and start to use their Debt collection software.

The heart of a Debt collection process is the use of Debt collection letters as these can put the small businesses position into context with the legislation in force, but in a non-confrontational and certainly unemotional style. This is likely to show that the small company means business but is working in an ethical and professional style. The Debt collection software needs to have either an on-line tutorial on the Debt collection process in general and Debt collection letters in particular, especially if the person delegated to use the Debt collection software has not been too involved in Debt collection in the past. A good suite of Debt collection software needs to be written around both the writing of Debt collection letters and also storing key actions for the purpose of later providing evidence of the work that been done in the Debt collection process on this occasion. The reason for this is because if the large company still does not pay the account then the small company could need to take them to court and the court will want to see evidence of the small company having made sufficient efforts to get the account paid before the case can be heard.

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