Organisation To Organisation Debt collection Tactics And Does The Law Help?
- Posted by admin on March 30th, 2010 filed in Finance
When a small enterprise has submitted their bill for work done or goods supplied to a larger enterprise and then find that it has not been settled after the agreed final settlement date, they could wonder if there is anything in the legislation that can help them. For business debts such as this, there is the “Late Payment of Commercial Debts (Interest) Act 2002”, which sets out single payments and daily interest that the small enterprise is allowed to charge on the outstanding debt. This legislation is only applied when the contract, agreed between both enterprises, does not contain a late settlement section, if it does, then the legislation cannot be applied as well. The small enterprise has the option of making the charges or not however the large enterprise cannot opt out of the late payment legislation.
If the small enterprise wishes to keep working or supplying goods to the large enterprise then before making any charges they should notify the large enterprise 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 applying[/spin] the legislation does not prompt settlement by the large enterprise then the small enterprise could see it as appropriate to start Debt collection proceedings. This can be done by several ways; a Debt collection organisation, which has expeience in commercial Debt collection, or a solicitor with similar experience, or even to buy of a Debt collection software package and keep the Debt collection activity to themselves.
Retaining the Debt collection activity internally can not only save money, but also permit the small enterprise to control the Debt collection activity. To allow them to do this efficiently the Debt collection software should contain instructions which explains the Debt collection activity in detail and most importantly, how to compose convincing Debt collection letters. The small enterprise will also need to provide adequate resources if this approach is to work and so competent members of staff should be selected, perhaps two or more so that there is coverage in the event or holidays, sickness or other absence. Computer experience would be a very useful requirement and also a good standard of English in order to compose good quality Debt collection letters. The Debt collection software should be able to pull the user along the Debt collection activity and illustrate to them how to compose Debt collection letters correct for different stages of the activity. A good way of doing this would be to include a suite of examples of Debt collection letters so that the user has a starting point from which they can customise the live Debt collection letters to suit the large enterprise 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 obtained it can be reused for any debts that come up in the future and the small enterprise only has to pay for printer consumables, stationery and postal costs. It the small enterprise was to use a solicitor or Debt collection organisation then they could well be charged 10% or more of the debt for the service, but this would be required for any future debts as well, so making these rather expensive options.
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