In the recent budget the Chancellor of the Exchequer promised a proposal for taxing finance houses to allow a fund to be put in place in case of another melt down of the financial sector. This might well make the finance houses consider how they deal with risks and this might include providing financial support to small firms. In the case of a small organisation that has been able to survive the financial climate so far but is now in need of help after an invoice with a large organisation has been late for some time, will the finance houses help or make them get the invoice paid first? The answer might well depend on too many variables to be definite, so possibly the best path is for the small organisation to look at Debt Collection first. They will have already contacted the large organisation and had no success in persuading them to pay the invoice so Debt Collection might well be their last resort.
When the small organisation checks out what Debt Collection services are available, they might well find lots of typical Debt Collection services such as lawyers and Debt Collection Agencies which have expeience in business to business Debt Collection. The risk here is that the financial climate has shown a growth in their numbers and although there are many ethical and professional lawyers and Debt Collection Agencies to choose from, there might well be those that are not so ethical in how they ply their trade. The last thing the small organisation wants is for the large organisation to be challenged by threatening letters or behaviour, carried out in the name of the small organisation, since this could easily damage irrevocably any business relationship that exists between the two firms. Also they might find that the costs are not acceptable since lawyers and Debt Collection Agencies charge in the region of 10% to 20% or more of the invoice value and this might well be plus expenses. This sort of percentage might represent a sizeable part of the profit for the small organisation and a price they might not wish to pay.
The other Debt Collection path they might wish to think about is Debt Collection Software where the small organisation carries out the Debt Collection project in-house instead of paying Debt Collection Agencies or lawyers. The benefits here are in the cost, where a decent Debt Collection Software application can cost around £40, and the negotiations with the large organisation are in their hands not those of a third party, so their business relationship can be preserved. There is another cost benefit in that once bought the Debt Collection Software can be used for any number of future Debt Collection projects; whereas solicitor and Debt Collection Agencies will charge their fees for each Debt Collection project they carry out.
Of course the small organisation will have to ear mark resources to manage the Debt Collection Software and to create the Debt Collection letters. They will need help in this and the documentation that comes with the Debt Collection Software must have a good help section that will explain how the Debt Collection process works and how to manage the Debt Collection Software to suit. There must also be help in creating the Debt Collection letters, with information on current legislation that can be used and also any sentences that Debt Collection Agencies use. In this way, with enthusiasm and dedication they must be able to persuade the large organisation to pay the overdue invoice and also show the bank that they can run their organisation effectively.
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This post was written by admin on July 28, 2010
