Business N Finance

For small firms who have been working with large firms for years and find that at times the larger organisation is slow in settling the bills, this can be a frustrating situation to be in. On the one hand the small organisation needs to be paid if it is to stay in business, but it also needs to keep on good terms with the large organisation in order to keep a steady flow of work.

There is legislation in place in the form of the “Late Payment of Commercial Debts (Interest) Act 2002”, which allows the small organisation the option of imposing a one-off charge as well as daily interest, if it so chooses, to cajole the large organisation to pay the bill. Whether or not to use this law is a difficult question for the small organisation, but if the large organisation has been settling late in the past, it might be wise to tackle this issue, before resorting to Debt collection method.

As a first move the small organisation should contact the large organisation and try and discuss the matter face to face in the hope of achieving a satisfactory solution, but if this fails then they might have to resort to Debt collection procedures.
The small organisation might think that their only move is to see a solicitor and see if they can help. Any solicitor could know about the aforementioned law, but one who specialises in Debt collection might be able to demonstrate evidence of how successful they have been in applying this to cases, perhaps some Debt collection letters, which of course will have had client details blocked out.

If the small organisation is suffering cash flow problems then the fees of using a solicitor or a Debt collection agency might be prohibitive and so they might need to check out some Debt collection software that they can buy in order to carry out the work themselves. They would need to carefully evaluate Debt collection software packages that they find in order to select one that has the right options. The creating of Debt collection letters is the key to the Debt collection method and the Debt collection software must provide the user with an easy way of creating Debt collection letters that are written in ethical and unemotional terms, usnig key aspects of the law where suitable. It is important that the Debt collection letters are written to promote the values of the existing partnership such as; proven work standards, fully trained personnel, and quick response to important issues.

In the end, it would be unwise for either the large organisation or the small organisation to break off relations. The large organisation would have to start looking for a organisation to take the place of one that they know well and are satisfied with the work and whose workers know the large organisation as well as their safety procedures and are probably on good relations with the workers of the large organisation. The small organisation will have to look for work elsewhere as they might well have only worked for the one large organisation and now are faced with trying to sell their services elsewhere in order to keep their staff and keep the organisation going.
So renegotiating the contract with a clause for late payments would be a good move for both parties

Related posts:

1. Who Are You Going To Call If A Large Organisation Seems To Be Deliberately Slow In Settling Your Accounts?
2. Can Government Legislation Help A Small Company Recover a Debt From a Large Company Which Is Late With A Payment?
3. Solicitors, Debt Collection Organisations, What Can A Small Organisation Do When They Have Outstanding Bills With A Large Organisation?
4. The Debt Collection Choices Available To A Small Company Which Is Owed Cash For Work Done For A Large Company.
5. What Can Be Done To Persuade A Frequent Late Paying Firm To Change To Pay On Time?