Should A Small Company Actually Want To Take A Large Company To Court Because They Haven

Posted by Credit expert

March 28, 2010

When an account has been with the large company on or beyond the agreed final date for settlement, for the small company to take the large company to court right away would be a bad move, not only because this option could seriously disrupt the working relationship, but also the court would not take the case unless sufficient efforts had been made for Debt collection before this. If it works out that the small company has been granted regular work by the large company and has not had any settlement problems in the past, they will have most likely achieved a good working relationship which relies on frequent recognition by both parties. A threatened court case, out of the blue, could certainly disrupt the working relationship, perhaps beyond repair and could be so damaging to the running of the small company, especially if the large company was a major client in terms of cash flow.

Once an account remains late beyond the final date, the first option that the small company should take would be to speak with the large company and try to understand what has caused the late settlement. If it was an easily rectified error then that would complete the Debt collection activity, but if the response was unexpected then the small company could feel correct in taking action in Debt collection, but first they should check the contract between themselves and the large company to see if there is a late settlement clause that can be used. If the contract does not show a simple solution then the small company could need to work out what they can do next. They could get hold of a solicitor who specialises in commercial Debt collection, or possibly look for a Debt collection agency which likewise specialises in commercial rather than personal Debt collection.

The third option is for the small company to evaluate Debt collection software that could provide an themselves solution, at a significantly lower cost than the other two path, for not only is Debt collection software starting at around the

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