Some large organisations may behave in what seem like self centred ways when it comes to paying what they see as unimportant accounts for projects completed or items that have been provided by a much smaller enterprise. For the small enterprise the amount outstanding may mean a significant amount of earnings and any delay can seriously affect their cash flow position. In cases like these the small enterprise may have to resort to Debt collection processes, which they may already have in place, especially if they have been faced with these situations in the past. For those small organisations that are faced with this situation for the first time, the next action may well ask questions, like “Who am I going to call?” Well possibly the Ghostbusters may present a daunting sight at the reception desk of the large enterprise, 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 may depend on the cash situation of the small enterprise, as charges for a solicitor who specialises in Debt collection, or a specialist Debt collection firm may be high, when compared to evaluating Debt collection software as a process of tackling the issue themselves. Debt collection software may be well worth considering for the small organisations who have been through Debt collection previously, as possibly way of doing it, since the solicitor or Debt collection firm 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 enterprise 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 enterprise that the small enterprise 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 organisations from taking advantage of their position and power to withhold payment to small organisations until they were ready.

It may be that the small enterprise was set up with good advice, possibly from Business Link and so it may be that the contract with the large enterprise 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 enterprise may then need to take the matter further and look to taking the large enterprise to court, or even just consulting a solicitor for that step, the small enterprise will need to show records 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 may work first time.

Posted in Finance ~