Persuading A Late Payer To Pay On Time In The Future, A Solution For Small Enterprises With An Unsettled Invoice At A Large Company.
August 28th, 2010 | by admin |The recession has brought difficult times to most businesses and has put some in the position of having to watch the pennies at one time or another. When this boils down to paying or not paying an invoice submitted by a small organisation which has done valuable projects, a decision to put off settlement can have a serious effect on the small organisation, which may well be in a similar position. The small organisation will no doubt have a much smaller staff count compared to the large organisation and may be family members of the organisation owner, which makes the decision over things like delayed wages tough. However the small organisation may well be unwilling to dive into Debt Collection proceedings without first getting hold of the large organisation to discover what is going on. The answer they receive to this contact should decide if the next stage is action or not. If it is action then their thoughts will turn to Debt Collection, but with preserving the good working relationship in the back of their minds. There may well also be financial restrictions so going straight for a well known Debt Collection method as lawyers or Debt Collection businesses which specialise in business to business Debt Collection may end up as too expensive when the bills come in from them. Besides paying a third party to try and persuade the large organisation to pay the invoice at your behest may have nasty repercussions for the small organisation especially if such persuasion is of an unwarranted or high pressure nature.
But how can the small organisation handle this Debt Collection issue and not spend lots of revenue in the process and also persuade the large organisation to pay invoices on time in the future? One not so obvious possibility is Debt Collection Software, which can permit the small organisation to take on the Debt Collection issue internally. In this way they will have first sight of any Debt Collection Letters before they get posted to the large organisation and so they can feel that their working relationship is in their hands. As they will be new to the Debt Collection business the Debt Collection Software must have a good set of instructions that will take their personnel through the ins and outs of the Debt Collection procedure, especially current laws appertaining to business Debt Collection. At present the “Late Payment of Commercial Debts (Interest) Act 2002” is aimed at businesses who delay paying invoices after an agreed settlement date. This legislation permits the organisation which is owed the money the decision of making a one-off charge as compensation for Debt Collection work done previously, and then also to charge daily interest on the late invoice until it is paid in full. It ought to be noted that this legislation only applies if the contract between the two businesses does not have a late payment clause.
The Debt Collection Software will need to have a tutorial for Debt Collection Letters so that the personnel in the small organisation understand what they can and cannot put into the live Debt Collection Letters. How to word the above legislation will be key to persuading the large organisation to treat the small organisation better in the future and a good way of doing this is for the Debt Collection Software to provide some templates for Debt Collection Letters at each stage of the procedure. These could provide a basis for the live Debt Collection Letters, but they will need to be editable to show the small organisation name and branding so that they look professional. In this way it is hoped that the small organisation can not only secure settlement of the present invoice but also retain their working relationship and ensure that future invoices are paid on time.