Keeping A Company Running When They Are In A Recession.
- Posted by admin on March 1st, 2010 filed in Business and Management
A recession can affect firms in different ways, for some it can force them out of business, some can continue virtually as normal, such as the finance houses including those that were bailed out by the country, whilst most likely the majority can keep afloat but discover that they have lower sales, greater stock prices and perhaps late payers and/or bad debts.
For this last group, managing the cash flow is essential and the capability to handle Debt collection efficiently may be the difference between survival and failure. There would appear to be three main options for Debt collection: solicitor, Debt collection organisation and do it yourself.
When considering how to manage late payers, the firms that are feeling the effects of the recession need to be sure if they want to remain on good relations with the customer for their products or services concerned or can they afford to have no more projects from them. The latter choice should be taken with care because it could result that the creditor operation gets their reputation tainted in the process. This question is crucial as it can change the approach that is chosen in Debt collection, because, if the Debt collection organisation approach is chosen then they must be sure that the organisation is registered with the Credit Services Association (CSA) as this demonstrates that they are licensed by the Office of Fair Trading (OFT) to practice. This is not often obvious from some web sites, but it can be checked out at the OFT and if there is a problem then that Debt collection organisation should be avoided. They could possibly have been refused a licence or had it withdrawn for using unethical practices when trying to recover debts, which would most probably have a negative effect on the creditor’s reputation.
Where a organisation has late payers but wants to not lose their employees then they shpuld use an economical option for Debt collection and this is where the DIY approach comes into the picture, as with this approach they are in control of what is done in the composition of Debt collection letters to make sure that not only ethical wording is used, but also courteous and unemotional wording. The best approach would be to try and get a package of Debt collection software along with a book on the subject from the same supplier, so that the software should compliment the book and vice versa. A good Debt collection software system would include templates for the Debt collection letters that are carefully crafted for each of the steps in the Debt collection path, which should be fully documented in the book. Similarly the Debt collection software should be able to record what events a user has performed to be able to provide a record for use by a solicitor in case the debtor doesn’t respond to the DIY Debt collection path and they have to be taken to court.
If the creditor does need to employ a solicitor then that person will need to be happy that the creditor has made enough attempts to get the debtor to settle, even if it is just a part payment to be going on with, before they would take it further. As noted earlier, a good package of Debt collection software should be written around this legal route being opted for at some part in the Debt collection path and so it should be able to accept inputs for all key events and then give an acceptable output.
It is hoped that most debtors would pay up during the DIY Debt collection path and the legal step would only be needed for those who were still in business but stubborn.
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