In situations where a small firm has provided services or products to a larger firm over a long period of time and has been paid promptly in the past, it could come as a surprise when the latest invoice goes beyond the final payment date. The small firm could be debating Debt collection procedures, but hopefully they will firstly contact the larger firm and try and understand why the latest invoice has gone strategy could be dependant on the end result of this conversation and if the larger firm has opened up to having some financial isues, perhaps from some of their own bills still awaiting payment, they could well offer a part payment on account. This could be acceptable in case both companies are keen to keep their mutual good relationship, and as the larger firm have been open and honest about their side of the issue the payment on account could be the best interim fix.
However, if the larger firm does not give a suitable reason to the small firm, then they could feel that they are being used as a free credit service and not as a trusted supplier. In this case they could well feel fully justified in exploring their choices for Debt collection, being mindful of the cost component of every path as the unpaid debt could represent a sizeable part of the cash flow for the small firm. The usual path for Debt collection could be seen as a visit to the solicitor to discuss the issue, but this consultation could have a fee to it and suppose the preferred solicitor is not very experienced in Debt collection, the small firm could need to look elsewhere. The next logical path could be seen as a Debt collection business, if there is one locally, if not then contact could be by phone and email, by which means it is problematic to evaluate the professionalism and integrity of the Debt collection business. It is possible that advertised ones are also the most recent and could lack experience in Debt collection, so it could be best to try somewhere like Business Link to see if they can recommend a debt collection business. It is possible that the Debt collection business will charge based on the value of the debt and so could be a significant amount.
The small firm could also look for Debt collection software so that they can take on the work themselves, but they will need to assess Debt collection packages carefully since the quality of the instruction book or on-line help could be their key to grasping not only how to operate the Debt collection software but how to run the Debt collection process to best effect. Debt collection letters form the key in the Debt collection process and the Debt collection software will need to have clear instructions on how to create suitable Debt collection letters for each phase of the Debt collection process, should the first of the Debt collection letters not prove successful. A more suitable solution to clear instructions, or perhaps as well as, would be to have the Debt collection software package include templates or samples of a suite of Debt collection letters, so that the small firm can use these as a starting point when generating their own Debt collection letters. The Debt collection software will also need to have some sort of database interface so that key activities in the Debt collection process can be stored, such as when Debt collection letters are despatched, registering incoming letters or emails and then permitting reports to be produced that will be useful as evidence should the Debt collection software operation not produce the required results and the large firm has to be taken to court.
