Theme: Does Commercial Debt collection Have To Be An Expensive Exercise For A Small Organisation With An Late Invoice At A Large Organisation?
July 28, 2010In the current economic climate, when a small firm has been supplying services or items to a large firm on many occasions, it may be a surprise when their last invoice has not been settled by the agreed last authorisation for payment date. If the large firm has kept up a good clearance record in the past then the small firm may feel that they have a good enough working relationship that they don’t want to mess up by going right into Debt collection strategies and firing off Debt collection letters. If the small firm has a late authorisation for payment section in their terms and conditions then they ought to apply this, but do it in an ethical and professional way, also keep the large firm informed of what they are going to do as this should not mess up the working relationship.
It may be that the small firm has not had to contend with Debt collection in the past and may now need to investigate what their strategies are. While they may be happy with sending invoices and then a reminder for a late payer, they may be less happy with writing Debt collection letters. In any business decision, there are many considerations but finance will always be one of the foremost considerations and in the Debt collection sphere the price can vary enormously between the various strategies. There are three main strategies for Debt collection; a legal practice who is experienced in Debt collection, a Debt collection organisation with commercial experience and finally, Debt collection software. The first two strategies allow the small firm to give the Debt collection procedure to a third party, while the third option brings the Debt collection procedure in-house. As may be expected the price associated with the three different strategies are very different as the legal practice and the Debt collection organisations will usually set theirfees as a percentage of the debt which may work out to be a significant sum, although some may offer a no win no fee deal. On the other hand the Debt collection software may well be priced at under