Keeping An Organisation Going When They Are In A Recession.
A financial downturn can affect firms in different ways, for some it can force them out of business, some can keep running virtually as normal, such as the finance houses including those that were rescued by the taxpayers, whilst maybe the majority can keep open but discover that they have poor sales, larger raw materials prices and maybe late payers and/or bad debts.
For this last group, managing the cash flow is important and the talent to take care of Debt collection efficiently may be the difference between survival and failure. There would appear to be three primary options for Debt collection: solicitor, Debt collection organisation and do it yourself.
When considering how to deal with late payers, the firms that are feeling the effects of the financial downturn need to be sure if they want to keep hold of the customer for their products or services concerned or can they afford to perform no more projects from them. The latter option should be taken not emotionally because it could result that the creditor firm gets their good name ruined in the process. This question is important as it can affect 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 proves 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 difficulty then that Debt collection organisation is to be avoided. They may possibly have been refused a licence or had it withdrawn for using unethical practices when attempting to collect debts, which would almost certainly have a harmful effect on the creditor’s reputation.
Where a organisation has late payers but wants to not lose their staff then they ought to use an economical route for Debt collection and this is where the DIY choice comes into play, as with this choice they are in in the driving seat 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 choice would be to try and obtain a package of Debt collection software along with a manual on the subject from the same supplier, so that the software should compliment the manual and vice versa. A good Debt collection software system would include templates for the Debt collection letters that are carefully composed for each of the steps in the Debt collection process, which should be fully documented in the manual. Similarly the Debt collection software should be able to record what actions a user has carried out in order to provide a record for use by a solicitor if the debtor doesn’t respond to the DIY Debt collection process and they need to be taken to court.
If the creditor does have to employ a solicitor then that person will need to be satisfied that the creditor has carried out sufficient attempts to get the debtor to pay up, even if it is just a part payment to start, before they would take the legal option. As noted earlier, a good package of Debt collection software should be built around this legal stage being taken at some part in the Debt collection process and so it should be able to accept entries for all key actions and then generate an acceptable output.
It is hoped that most debtors would pay up during the DIY Debt collection process and the legal step would only be needed for those who were still in business but stubborn.
Posted: February 28th, 2010 under Business.
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