When a small company that has been supplying goods to a large company on a regular basis discovers that the latest bill has not been settled on time and is overdue, the accepted strategies of following up this debt may be to consult a solicitor, preferably one who specialises in Debt collection, or to take on a Debt collection agency and let them take on the Debt collection on the small company’s behalf. However by taking a strategy like this straight away the small company might put the business relationship they have built up with the large company at risk and might not only lose future orders but might damage their status in the wider business community. Even so, they ought to make some attempt to contact the large company and make them aware of the unsettled bill and emphasise what it means to the small company. If this fails to get the large company to pay the bill then the small company will need to examine what choices are available to them apart from the accepted choices as mentioned earlier. There is in reality only one viable alternative, Debt collection software, which the small company can purchase, own and reuse as many times as they have to, should future Debt collection come about.

They will have to carefully examine the market offerings for Debt collection software and see if they can get a balance between price and functionality. In general, the minimum functionality the small company should be looking for are; the ability to compose convincing Debt collection letters and the ability to store happenings related to the debt in a database, time stamping each action so as to provide a record of what was done by the small company in the Debt collection operation.

The Debt collection letters are at the heart of the Debt collection operation and must be carefully written if they are to be effective in the Debt collection operation. The Debt collection software needs to provide guidance in creating the Debt collection letters, either by a well written tutorial that takes the user through the operation and explains what they are best putting in the Debt collection letters. In this way the user will be made aware of the ways of building up the Debt collection letters, as well as pointing out the importance of good grammar and spelling. An alternative to a comprehensive tutorial might be the provision of electronic templates for the Debt collection letters, which the user could use as a basis for their own Debt collection letters. In this context the record keeping function of the Debt collection software could provide useful in allowing the user to bring in details of the debt for placing in the Debt collection letters, such as the large company details and the debt value, which might assist in preventing transcription errors that could occur from keying these from a paper document.

By the use of appropriate Debt collection software the small company needs to have a good chance of getting the large company to settle the bill without losing credibility and keeping future orders. The recording of happenings by the Debt collection software will be useful in case the large company fails to settle the bill and the small company decides to take them to court, as this record will show that the small company has made strong efforts in the Debt collection operation already.

Some large organisations could conduct themselves in what seem like selfish ways when it comes to paying what they see as small invoices for projects completed or goods that have been supplied by a much smaller business. For the small business the amount outstanding could be a significant amount of revenue and any delay could seriously affect their cash flow standing. In cases like these the small business could have to resort to Debt collection strategies, which they could already have in place, especially if they have found themselves in these situations previously. For those small organisations that are faced with this situation for the first time, the next move could well pose questions, like “Who am I going to call?” Well maybe the Ghostbusters could present a daunting sight at the reception desk of the large business, but maybe they aren’t the best team for Debt collection, as that’s physical rather than metaphysical .

The choice of what to do next could depend on the liquidity of the small business, as fees for a solicitor who specialises in Debt collection, or a specialist Debt collection organisation could be high, when compared to looking at Debt collection software as a method of tackling the situation themselves. Debt collection software could be well worth considering for the small organisations who have experienced Debt collection previously, as possibly way of doing it, since the solicitor or Debt collection organisation 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 business 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 business that the small business 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 could be that the small business was set up with good advice, maybe from Business Link and so it could be that the contract with the large business was written to include a late payment penalty clause, so in these cases the Debt collection software should permit the user to substitute 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 business could then need to take the matter further and look to taking the large business to court, or even just consulting a solicitor for that step, the small business 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 could work first time.

The answer to this question largely depends on the current financial situation of the small company and the value of the debt owed by the large company, since the charges levied by lawyers and Debt Collection firm might be typically in the range of some 8% to 10% or more of the outstanding debt value. This fee should normally be taken off the debt after the Debt Collection procedure has been brought to a close and there might also be initial charges levied maybe for Debt Collection Letters to start the Debt Collection procedure rolling. None of these charges are likely to include court costs if the large company is taken to court by the lawyers or Debt Collection firm and so should add to the net loss on the part of the small company.

If the small company has known this degree of Debt Collection, then in the better financial times the charges might have been acceptable if there was plenty of jobs coming in, but in the current economic downturn incoming jobs might have lessened and the small company might well look at the charges charged by lawyers or Debt Collection firm and asked if there was a more cost effective way of chasing up the current late payer. If the small company is prepared to expand their options then they might get to know about Debt Collection Software, which for around £100 will allow the small company to take on Debt Collection with their available resources and so potentially save money over the more conventional Debt Collection strategies.

The small company will have to accept that they don’t have the teams of employees to chase up the large company nor the experience that comes from years in the Debt Collection business. However if they investigate the Debt Collection Software systems carefully and select one that has a good a user guide and training module on the Debt Collection procedure then they should gain some confidence in tackling Debt Collection. The Debt Collection Software should provide a good set of samples of Debt Collection Letters as well as guidance in how to create Debt Collection Letters that can push the large company to pay the invoice quickly. The Debt Collection Software will need to be up to date with legislation that can be used in the Debt Collection procedure such as the “Late Payment of Commercial Debts (Interest) Act 2002” so that the clauses from this legislation can be put into the Debt Collection Letters where appropriate.

The most important part of using Debt Collection Software for the small company is in the designation of resources especially the employees allocated to work on the Debt Collection Software and in particular to create good quality Debt Collection Letters, which are the heart of the Debt Collection procedure. These Debt Collection Letters need to be composed in good English grammar and with no spelling mistakes. They must avoid emotional language and be direct and to the point, in order to show the small company in a professional light. One further part of the Debt Collection Software that the small company should look for is database functionality so that each stage of their Debt Collection procedure can be registered and made available in an easily understood report. This is because if they take the large company to court, the court officials will want to see evidence of serious efforts in the Debt Collection procedure on the part of the mall company before they will accept the case.

Any successful small company should be able to make the Debt Collection Software option work and so they might well find that their original expenditure of some £100 is paying dividends in getting debts paid on time and not paying out large charges to lawyers or Debt Collection firm.

In these difficult business times it would be no surprise to see a rise in late settlements of accounts from one enterprise to another, since some organisations will feel that as money is tight they may as well keep their money to make some interest for as long as possible. This situation has little concern for the effect this can have on a small enterprise that has done jobs for a larger enterprise and has seen their latest account for jobs done go past its final settlement date. The small enterprise may well have other unsettled accounts with other larger organisations and so their cash flow may well be under pressure. The small enterprise may well consider legal proceedings and go to see a solicitor to see where they stand. If the debts have just gone past the late settlement dates, then the solicitor may well advise that they need to chase the larger organisations to try and get them to settle the accounts. This advice will cost money however, as will any offers from the solicitor to take on the Debt collection operation on behalf of the small enterprise. The reason for initiating the Debt collection operation is because if the small enterprise decides that at a later stage they have had little or no success in Debt collection themselves and they wish to go to court, the court will want to see evidence of the work they have done in the Debt collection operation before the case can be heard.

If the debts are many thousands of pounds in total then fees from either a solicitor who specialises in Debt collection or a commercial Debt collection business may work out to a significant sum. So, the small enterprise would be well advised to investigate Debt collection software and specifically a package that either comes with a database, or can provide links into an existing database application, such as Microsoft Access or SQL, or Oracle for example. This is necessary because it provides a method for recording the events that take place as part of the Debt collection operation and these should then be available in a report to show to the court should this step be required.

A key part of the Debt collection operation is the writing of Debt collection letters and the Debt collection software should have a good guide to how to create convincing Debt collection letters. This can be provided by good on-line help, a instructions or pre defined templates that can be used as a base for real Debt collection letters, or all of these things. It would be best for the small enterprise to have one or maybe two employees handle the Debt collection operation, so that they can become familiar with the Debt collection software, the writing of Debt collection letters and get to know the Debt collection operation itself. The Debt collection software will need to record key events such as when Debt collection letters are created, at which stage of the Debt collection operation they are used, register incoming physical mail as well as emails and any part settlements that are received, automatically updating the outstanding debt accordingly.

The beauty of Debt collection software is not just that it can make the Debt collection letters easier to create, but that the one Debt collection software package can be used for many debts with no extra outlay, whereas a solicitor or Debt collection business will make a new charge for each debt they handle.

When a small organisation has sent an invoice for projects completed or goods provided to a large organisation which they have worked with for a long period, they could be a bit take aback to realise that on this occasion they have not received authorisation for payment by the agreed final date for authorisation for payment. They will have got in touch with
the large organisation to discover what has taken place, in the hope that this chat will be all that is required to get authorisation for payment. If however, they discover that the large organisation has difficulties that prevent them from paying the invoice at the moment, leaving the small organisation with a hole in their revenue and big decisions to make. If the debt is low enough, the small organisation could just put it on the back burner it and trust to the large organisation to pay the invoice in their own time, but if it is a significant amount for the small organisation then they could need to look at Debt Collection options.

Traditional Debt Collection boils down really to legal practices or Debt Collection organisations, so long as they are skilled in commercial Debt Collection and not just personal Debt Collection. Any reputable Debt Collection service must be able to provide a sample demand letter to illustrate the standard of their work. Both of these options allow the small organisation to give over the Debt Collection procedure to a third party and trust to their honesty and professionalism to get the large organisation to pay the invoice, either in full or by part payments. The negative aspect here is that this service can be costly either up front or as a deduction from the debt when collected, or a combination. It is normal for these costs to be in the 8% to 10% range or more of the debt value.

The internal strategy is with Debt Collection Software but this of course requires the dedication from the small organisation in employees to dedicate to the Debt Collection procedure and also in the risk of failure, still the head of the small organisation must be used to taking risks otherwise they wouldn’t still be in business. The costs of Debt Collection Software could begin below the £100 mark and this must make it a viable strategy for the small organisation. The Debt Collection Software must come with a a set of instructions that must demonstrate how the Debt Collection procedure works and how to generate good quality Debt Collection Letters. These Debt Collection Letters are at the heart of the Debt Collection procedure since they comprise the communications link with the large organisation and so must be generated in good English with no spelling or grammatical errors. The Debt Collection Software must contain templates of Debt Collection Letters so that the employees running the system have assistance in what they can write into the Debt Collection Letters at each point of the Debt Collection procedure, certainly in respect of legislation that is presently in force such as the “Late Payment of Commercial Debts (Interest) Act 2002”. This act allows the small organisation, in this case, to charge both a one-off fixed fee and interest on a daily basis while the debt remains uncleared. These charges only apply if there are not enough sections in the contract that must exist for the work done between the two enterprises.

Armed with this information and assistance the small organisation must be able to offer the commitment to run the Debt Collection procedure with their available resources and make it work.