Posts Tagged ‘debt’

When a small organisation has completed many contracts for a range of larger businesses and has never had any unpaid settlement of their invoices, it may come as a let down if one of the large businesses has let their latest bill go later than the agreed settlement date without paying it. After such a long profitable working time with larger businesses, the small organisation is sure to have generated a good professional relationship with them all and would not wish to ruin this by not touching base with the large organisation concerned first to get their side of the story. They will hope for a positive outcome and soon see the bill payment arrive, but if this doesn’t happen and the small organisation thinks that they are not getting all of the information they ought to then they may think that they are being used. They may then decide that their only chance of getting the bill paid is by Debt Collection proceedings.

As this is the first unpaid bill settlement for the small organisation, their experience of Debt Collection procedures is probably very limited and their initial searches may well bring up the accepted Debt Collection services of lawyers and Debt Collection Agencies. However the economic situation has seen an increase in the numbers of Debt Collection Agencies and lawyers offering commercial Debt Collection services, but the small organisation needs to be mindful that not all of the new ones may be as ethical as established lawyers and Debt Collection Agencies. This can affect the small organisation in two man ways; firstly the debt unethical collection agencies or lawyers may use bad Debt Collection methods that could tarnish the hard won professional reputation and secondly the fees may not be apparent initially and so could rise alarmingly as the Debt Collection operation continues. It may be very difficult for the small organisation to distinguish between good and bad lawyers and Debt Collection Agencies and so the risks may not be worth taking.

The other Debt Collection method is Debt Collection Software whereby the small organisation takes on the Debt Collection project with their available resources. This has financial benefits but on the other hand the small organisation has to supply their own resources to use the Debt Collection Software. The financial benefits come from the fees for lawyers and Debt Collection Agencies being in the range of 10% to 20% or more of the bill value, and the price for a decent Debt Collection Software application being around the £40 mark.

The small organisation 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 operation, which needs to be provided by the user guide that comes with the Debt Collection Software application. The user guide needs to also emphasise the role that Debt Collection letters play and needs to also provide details of current Acts of Parliament and also any sentences that Debt Collection Agencies use. It needs to be stressed that those people designated to compose the Debt Collection letters ought to have a good command of English since any spelling or grammatical oversights can disrupt the Debt Collection operation. So with dedication the small organisation should be able to get the large organisation to settle the unpaid bill and at a much more advantageous price that lawyers and Debt Collection Agencies. Furthermore the Debt Collection Software is a purchased item and so it can be used for any new debts at no extra cost, whereas lawyers and Debt Collection Agencies will charge their fees for every debt they manage.

Perhaps it won’t end up as a case of survival or not if a small organisation cannot get financial support from their financial institution or are granted hekp but are charged a high rate of interest, but in the present financial climate an uncleared account may well be very important in the revenue stream of a small organisation. If the small organisation has spoken withthe large organisation to be informed why the account has not been cleared and has not received a suitable reply then they may well be in a tough position. If the financial institution is unwilling to extend their overdraft facilities or will only do so at a larger interest rate then they will have to try and seek out a cost effective Debt Collection solution to get the large organisation to settle the late account. They will have to be careful to look after the business relationship they may well have grown with the large organisation over the years since this may be key to their future survival prospects.

When the small organisation searches for Debt Collection services they may well come across lots of traditional Debt Collection methods such as Debt Collection Agencies and solicitors that specialise in commercial Debt Collection, but although they may advertise good success rates, the small organisation won’t be able to evaluate them from an ethical point of view. This is because the financial climate has seen a sharp rise in the numbers of Debt Collection Agencies and solicitors offering commercial Debt Collection methods, there is no guarantee of professional standards since any web site designer can put icons from any professional body onto a web page. This can catch an unknowing small organisation out if they unwittingly sign up with dodgy Debt Collection Agencies or solicitors and find that they get problems, maybe excessive charges or unreliable Debt Collection actions employed that ruin their business relationship with the large organisation. At worst they may not see any of their money at all.

A different Debt Collection method with a rather different set of risks is the DIY path of using Debt Collection Software. The risks are mainly that the small organisation has to take on the Debt Collection operation themselves and may well have to learn about the Debt Collection operation while they are doing it, so there is a risk of failure. Another risk is that they will have to pay for the Debt Collection Software up front, whereas solicitors and Debt Collection Agencies typically work by deducting their fees from the account value once it is collected. In normal circumstances this may present a difficulty if the financial institution has refused financial help and the small organisation is short of cash, but in reality a good Debt Collection Software application can bebought for around £40, so hopefully this won’t present a problem. The small organisation will, of course, have to allocate resources to both manage the Debt Collection Software and to compose the Debt Collection letters, which are at the heart of the Debt Collection operation. When looking at Debt Collection Software applications particular notice should be taken of the documentation, in that the small organisation will need guidance on how the Debt Collection operation works and also what they can put into the Debt Collection letters. It would be helpful if the documentation contained details of current legislation and also any wording that Debt Collection Agencies use, that could be used in the Debt Collection letters.

So long as the people in the small organisation prepare correctly and pay attention to the documentation, they should be able to use the Debt Collection Software to recover their account payment and end up with a greater proportion of the money that they would have by using solicitors or Debt Collection Agencies.

When one company has been doing work for a larger company over many years, then it is most likely to have seen a good commercial relationship grow over that time and one which both businesses will of course value. However every relationship has its ups and downs and if the current financial climate puts pressure on the large businesses finances they may like to wait to pay they accounts, maybe to get some more interest. The small company also wants their money for the work completed and of course the financial climate may have hurt them as well. So, if the bill is now unpaid then the small company will of course first get hold of the larger company to be informed why the bill hasn’t been cleared as usual. If the reply is that the large company will want the small company to wait for payment, which may be another month or so, then the small company may feel that they are being taken for granted and giving but not receiving anything in return. Given the long standing commercial relationship the small company may not like the way they are being handled but also may want to retain the commercial relationship for the future.

The small company may now wish to check out Debt Collection solutions that could be done professionally and ethical, but as the financial climate has seen an increase in the number of solicitors and Debt Collection businesses, the small company may not be sure if opting for one of these typical Debt Collection methods will be safe in terms of holding onto the commercial relationship. Their concern may be over what the solicitors or Debt Collection businesses would do if the larger company played hard ball, would they simply take them to court without delay or would they use threatening or unethical tactics to force them into paying. The other Debt Collection option available to the small company is Debt Collection Software which would allow them to take on the Debt Collection project internally. In this way they will have full control of the dealings between themselves and the large company and so can hope to hold on to the commercial relationship.

Of course the small company would need to buy a Debt Collection Software application that includes a user guide that would give them some training on the Debt Collection activity and especially how to generate Debt Collection Letters. They would need to allocate resources to get the best out of the Debt Collection Software and for the purpose of creating Debt Collection Letters they would need to have someone with a good command of English. The Debt Collection Letters are at the core of the Debt Collection activity and to send one out with spelling or grammatical errors could harm both the Debt Collection activity and the commercial relationship, so it may be best for Debt Collection Letters to be checked by a second person before despatch.

It is hoped that the small company can receive payment for the bill via Debt Collection Software and well created Debt Collection Letters and also get back to the stable payment conditions of the past.