Everyday Blog

Mr Vince Cable, the Business Secretary, has recently made it known that finance houses are “not acting in the national interest”. This is because many of the finance houses do not appear to be lending to small businesses and some small businesses are failing, perhaps because of lack of funding. From the finance houses side, they make the point that they have lent out £6.8bn in June this year, but also say that businesses are reluctant to take on loans when the economic outlook is so uncertain. Mr Cable has targeted dividends and bonuses as monies that could be diverted into small enterprise loans and he has talked about a “carrot and stick” approach if the finance houses do not change.

While this change will be welcomed by small businesses, no doubt, for a small enterprise that is waiting for completion of an late bill with a large enterprise, for jobs done or merchandise delivered, this may well come too late if they are in need of the bill completion. The small enterprise would no doubt communicate with the large enterprise when the bill goes late, to learn what is happening with their bill, and hope to receive an acceptable result. If they don’t get an acceptable result then they may feel that they are being taken advantage of and then find out about Debt Collection. Their cash flow can easily influence which Debt Collection route they can take, where the accepted Debt Collection providers of solicitors and Debt Collection Agencies will charge from 10% to 20% or more of the bill value. Choosing a DIY approach by using Debt Collection Software can cost around £40 for a decent Debt Collection Software package, but the small enterprise will have to allow for the designation of resources such as employees, and time to balance out the lack of skilled employees that solicitors and Debt Collection Agencies have available for Debt Collection contracts. Money maybe tight and the Business Secretary may not be able to get the finance houses to both offer funding and at a reasonable price before they get the late bill paid, so their best choice may well be Debt Collection Software. A further cost advantage of Debt Collection Software is that it is a one off purchase and so can be brought into play for any future Debt Collection operations that they have to deal with, whereas solicitors and Debt Collection Agencies will bill for their services every time.

To balance out the lack of expertise in Debt Collection, the small enterprise will need to pay careful attention to the documentation set that is included in the Debt Collection Software, in particular any instructional modules, either as part of the Debt Collection Software itself or online from the producers of the Debt Collection Software, to educate them in the Debt Collection activity. They will need particular training in how to write good quality Debt Collection letters since these are at the focal point of the Debt Collection activity. Useful details that should be imparted includes any suitable Acts of Parliament and any good wording that Debt Collection Agencies use. The employees selected to write the Debt Collection letters need to have a good knowledge of English so that the Debt Collection letters won’t have any spelling or grammatical oversights in them when they are sent out as this can harm the Debt Collection activity.

If the small enterprise and its employees work hard on the Debt Collection Software and write good quality Debt Collection letters that they should have a good chance of persuading the large enterprise to pay the late bill and for a much cheaper price that solicitors and Debt Collection Agencies would have charged them.