MB Information Age

Posts Tagged ‘recovery’

Consider this scenario; you have had contracts with a business who has made use of your services quite a few times over the past two years and has always settled your bills within the agreed time, but now you haven’t had your latest invoice settled and it is one month overdue. You have been in touch with them to get to know what is going on and they told you that they will be paying their invoices somewhat later than normal and are confident to be able to send payment by the end of the quarter. You have made, what seemed to you as a good business relationship with this multi national enterprise (MNE) client which is a big name in the country, but their latest time lines for payment are way too late for you. You have to settle your own bills such as; suppliers for products you had to buy for the work for this client, the wages of the small part-time team who assisted you to carry out the project. Also this unpaid invoice is key to you, but is no doubt unimportant for the MNE client, and probably one of several that are also awaiting payment. So, do you use a Debt Collection company, engage a solicitor, or do you buy a package of information and Debt Collection Software with templates for the Debt Collection Letters and do it yourself?

The last thing you want to do is sour the relationship you have with the client, so nasty letters and phone calls are out of the question, so what are the options to achieve this and get your invoice at or near to the top of the pile?
There are Debt Collection companies that you could make contact with to undertake the work, but your experience of these is minimal and it would finish up as a search through Yellow Pages for whom to contact. Not the best way to find someone you can trust to get your payment made without ruining your reputation with the client, and there will be their costs to pay.
You could contact a solicitor and get them to chase the client, but this would possibly be more expensive than a Debt Collection company and would be very likely to ruin the client relationship.
Another method that few people may make use of for this is the DIY approach, whereby you can obtain the required information and then with that, produce the sequence of Debt Collection Letters that are formal, straightforward and unemotional and follow a known path of the stages required to get to a satisfactory receipt of the invoice.

The DIY approach to Debt Collection can involve quite a lot of time and effort especially in writing the Debt Collection Letters according to the guidelines in the information pack, then there is posting them off and finally keeping a record of activities in sufficient detail as to be useful should the process proceed into court proceedings. To satisfy these requirements it would be well worth evaluating Debt Collection Software which could manage the Debt Collection Letters and the record keeping, leaving the user to take care of the postage and entering information such as received letters or better still, the actual paid invoice.
It is likely that the information pack will be an e-book, which can be used on-line and could be updated as part of the initial purchase. Likewise the same supplier could also have Debt Collection Software available that would be built around the e-book and store the details in a database for later retrieval and printing out.
The costs for such a dual package are likely to be in the tens of pounds region, whereas Debt Collection companies or legal proceedings are more likely to be in the hundreds to thousands of pounds region, so this is a better path to follow for a small company with limited funds.

It could be fair to say that at some period in its existence a organization would be faced with one or more unpaid invoices and would have to either try and recover the debt or write it off. Depending on the size of the organization and the size of the debt, and to some extent the frequency of this occurring, the organization may do their own Debt Collection, including sending out Debt Collection Letters and generally chasing the debtor. A small organization may invest in Debt Collection Software to help them with the process. If the organization is unwilling to undertake this work by themselves then they may well opt to pass the Debt Collection over to a specialist company.

If the organization decides to go down the DIY route then they should do some investigation first to find out what support is available to them in this Debt Collection process, also to try and find out how successful this route has been for previous clients, hopefully with examples of the value of debt and what was recovered. Hopefully in this way they should take up the Debt Collection process with awareness. They should assign sufficient resources of time, money and people to the Debt Collection activities, which can vary from composing and posting Debt Collection Letters, phone calls to taking serious steps such as discussing it with a solicitor if the Debt Collection process has not produced results so far and legal action is needed.

Once the organization has discovered how to do their own Debt Collection they may well find that only a few bad debts require legal proceedings.

The solicitor will require evidence of the organization having undertaken the Debt Collection process to some extent already and this is an area where Debt Collection Software can be a help. There are many such programs on sale but what should be high on the shopping list of functionality is the ability to register key activities and to automatically create Debt Collection Letters. The function to record phone calls as audio files would be so useful and much better than a typed version of the phone call from memory later. The function to produce an activity report which could show the date and time of actions and a short summary of what happened would be very useful in illustrating the chain of events that resulted in the legal proceedings. In terms of evaluating the Debt Collection Software it is useful if a free demo version could be used initially to get a feel for its suitability to the task in hand. These are usually a cut down version which has some procedures disabled from the full version. A cut down version may allow the writing of Debt Collection Letters but may not permit them to be printed out, or it may permit Debt Collection Letters to be printed but may watermark the paper with some text such as “Draft” or “Unlicensed” in order to make the letter useless.

If the organization decides not to use the DIY process they may well try and find a Debt Collection business to do the work for them. In searching for such a company their track record and success rate in recovering debts would be good to know, as well as the obvious question of costs, such as is there a fixed fee or is it a percentage of the debt, or then again is it no win no fee.