For small organisations who have been working with large organisations for years and find that occasionally the larger organisation is tardy in paying the bills, this can be a frustrating situation to be in. On the one hand the small organisation needs to be paid if it is to stay in business, but it also needs to keep on good terms with the large organisation in order to maintain a steady flow of work.

There is legislation in place in the form of the “Late Payment of Commercial Debts (Interest) Act 2002”, which allows the small organisation the choice of imposing a one-off charge as well as daily interest, if it so chooses, to persuade the large organisation to settle the account. Whether or not to apply this act is a difficult question for the small organisation, but if the large organisation has been paying late in the past, it might be wise to sort out this issue, before resorting to Debt collection strategy.

As a first move the small organisation should contact the large organisation and try to discuss the matter face to face in the hope of coming to an agreeable solution, but if this fails then they might have to resort to Debt collection processes.
The small organisation might think that their only path is to see a solicitor and see if they can help. Any solicitor might know about the aforementioned act, but one who specialises in Debt collection might be able to provide evidence of how successful they have been in applying this to cases, maybe some Debt collection letters, which of course will have had client details blocked out.

If the small organisation is suffering cash flow problems then the costs of using a solicitor or a Debt collection agency might be prohibitive and so they might need to check out some Debt collection software that they can buy in order to do the job themselves. They would need to carefully examine Debt collection software packages that they find in order to choose one that has the right features. The composing of Debt collection letters is the key to the Debt collection strategy and the Debt collection software must provide the user with an easy way of composing Debt collection letters that are created in ethical and unemotional terms, bringing in key aspects of the act where appropriate. It is essential that the Debt collection letters are created to promote the positives of the existing partnership such as; proven work standards, fully trained personnel, and quick response to essential issues.

In the end, it would be unwise for either the large organisation or the small organisation to break off relations. The large organisation would have to start looking for a organisation to take the place of one that they know well and are satisfied with the work and whose workers know the large organisation as well as their safety procedures and are probably on good relations with the workers of the large organisation. The small organisation will have to look for work elsewhere as they might well have only worked for the one large organisation and now are faced with trying to sell their services elsewhere in order to keep their staff and keep the organisation going.
So renegotiating the contract with a clause for late payments would be a good move for both parties

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