If the small firm has been doing jobs or delivering equipment to the larger firm for some time, perhaps years, the likelihood of a late settlement now and again might be fairly high, after all we all make mistakes don’t we? However in the current financial climate, the small firm might need completions promptly from all customers and hope that some of them will settle before time. If the invoice to the larger firm is of a high value, even in just small firm terms, say a few thousand pounds possibly, then this might have a significant effect on their cash flow, after all they will have their own invoices to pay on time and the unpaid invoice could make the difference between solvency and administration. If the professional relationship has been built up over years then the last thing the small firm will want is to throw all that away by going straight for Debt Collection methods, such as a lawyer or Debt Collection companies, where strong Debt collection letters might get sent out.

The small firm should get in touch with the larger firm to try and find out what has taken place. The pro here is that it might turn out to be a error which could be fixed quickly and it also helps to retain the professional relationship. The possible con is that if the larger firm is having revenue problems then they might play for time instead of being open and try and make the small firm wait longer that they should.

If the small firm finds that they are not going to get the invoice paid then they might well look into Debt Collection processes. There are two what might be described as conventional processes; a lawyer, or Debt Collection companies, which specialise in commercial Debt Collection. The pros here are that they should bring skill in generating good Debt collection letters and also have the workers and the time to devote to the Debt Collection process. They might well have a sample demand letter as an example of their past work. The cons are largely the cost of that skill, workers and time, where charges of around 10% and more are typical, and if a court appearance is recommended then the charges can rise even higher. One more con is that these charges are made for any future debts they take on. There is a third path, that of Debt collection software which will allow the small firm to handle. The pros here are cost since Debt collection software packages can start under £100 and once up and running it can be utilised for any future Debt Collection. The cons are that the small firm will have to make resources available themselves , such as workers to operate the Debt collection software and write the Debt collection letters, a printer to produce formal copies of the Debt collection letters, although this might be an existing office printer, and finally a new machine might be required. Provided the small firm chooses wisely and buys a Debt collection software package that provides a good a manual, which explains the Debt Collection process in detail and also how to write convincing Debt collection letters, relevant to each stage of the Debt Collection process. The provision of a sample demand letter for these Debt collection letters would help the workers to write effective Debt collection letters of their own that should prompt the larger firm to pay the invoice, especially if they find more Debt collection letters arriving, sent as part of a structured Debt Collection plan.

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