A Small Organisation Has Their First Late Invoice And Needs To Find A Good Debt Collection Method. Are Normal Ones The Best?
Posted on June 30th, 2010 in Uncategorized | No Comments »
When a small firm has completed many contracts for a number of larger businesses and has never had any overdue settlement of their bills, it might come as a surprise if one of the large businesses has let their latest account go past the agreed payment date without paying it. After such a long successful working time with larger businesses, the small firm is certain to have generated a good business relationship with them all and would not wish to ruin this by not contacting the large firm concerned first to get their side of the story. They will hope for a positive reply and soon see the account payment arrive, but if this is not the case and the small firm thinks that they are not being given all of the information they ought to then they might feel as though they are being used. They might then feel that their only chance of getting the account paid is by Debt Collection proceedings.
As this is the first overdue account payment for the small firm, their experience of Debt Collection procedures is probably very limited and their initial searches might well bring up the typical Debt Collection services of legal practices and Debt Collection Agencies. However the financial climate has seen an increase in the numbers of Debt Collection Agencies and legal practices offering commercial Debt Collection services, but the small firm needs to be mindful that not all of the new ones might be as ethical as established legal practices and Debt Collection Agencies. This can affect the small firm in two man ways; firstly the debt unethical collection agencies or legal practices might use bad Debt Collection methods that could tarnish the hard won business reputation and secondly the fees might not be apparent initially and so could rise alarmingly as the Debt Collection activity continues. It might be very difficult for the small firm to distinguish between good and bad legal practices and Debt Collection Agencies and so the risks might not be worth taking.
The other Debt Collection method is Debt Collection Software whereby the small firm takes on the Debt Collection project themselves. This has financial benefits but on the other hand the small firm has to supply their own resources to manage the Debt Collection Software. The financial benefits come from the charges for legal practices and Debt Collection Agencies being in the range of 10% to 20% or more of the account value, and the price for a decent Debt Collection Software application being around the £40 mark.
The small firm will have to work hard to get the best out of the Debt Collection Software application since they will need to learn about the Debt Collection activity, which should be included in the set of instructions that comes with the Debt Collection Software application. The set of instructions should also emphasise the role that Debt Collection letters play and should also provide details of appropriate legislation and also any wording that Debt Collection Agencies use. It should be stressed that those personnel assigned to compose the Debt Collection letters ought to have a good grasp of English since any spelling or grammatical mistakes can disrupt the Debt Collection activity. So with dedication the small firm should be able to get the large firm to settle the overdue account and at a much more advantageous price that legal practices and Debt Collection Agencies. Furthermore the Debt Collection Software is a bought item and so it can be brought into use for any other debts at no extra cost, whereas legal practices and Debt Collection Agencies will charge their fees for every debt they manage.