Business To Business Debt collection Methods And Does The Government Help?
When a small company has sent their bill for work done or products supplied to a larger company and then find that it has not been paid after the agreed last payment date, they might wonder if there is something in the law that can help them. For business to business debts such as this, there is the “Late Payment of Commercial Debts (Interest) Act 2002”, which details one time payments and daily interest that the small company is allowed to charge on the unpaid debt. This act is only applied when the contract, agreed between both businesses, does not have a late payment section, if it does, then the act cannot be applied as well. The small company has the choice of requesting the charges or not however the large company cannot opt out of the late payment act.
If the small company has to keep working or supplying products to the large company then before requesting any charges they should notify the large company what they are proposing to do. In addition it is good to send a revised bill displaying the charges being made so that it is clear what is being charged for. If using[/spin] the act does not prompt payment by the large company then the small company might see it as appropriate to launch Debt collection proceedings. This can be done by several ways; a Debt collection firm, which is talented in commercial Debt collection, or a lawyer with similar talent, or even to purchase of a Debt collection software package and keep the Debt collection operation internal.
Retaining the Debt collection operation internally can not only save revenue, but also enable the small company to control the Debt collection operation. To allow them to do this effectively the Debt collection software should include a user guide which explains the Debt collection operation in detail and most importantly, how to create convincing Debt collection letters. The small company will also need to allocate enough resources if this path is to work and so competent workers should be selected, perhaps two or more so that there is support in the event or holidays, sickness or other absence. Computer literacy would be a very useful requirement and also a good standard of English in order to create good quality Debt collection letters. The Debt collection software should be able to pull the user along the Debt collection operation and display to them how to create Debt collection letters suitable for different levels of the operation. A good way of doing this would be to provide a suite of templates of Debt collection letters so that the user has a starting point from which they can edit the real Debt collection letters to suit the large company details, which will be essential if the Debt collection letters are to be taken seriously.
A really good benefit of Debt collection software is that once purchased it can be reused for any debts that come up in the future and the small company only has to pay for printer consumables, stationery and postal costs. It the small company was to use a lawyer or Debt collection firm then they might well be charged 10% or more of the debt for the service, but this would be asked for for any future debts as well, so making these rather expensive strategies.
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