A report by Will Smale who is a Business Reporter for the British Broadcasting Corporation entitled “Bank lending to small firms still a mixed picture”, cites a recent interview with Vince Cable, the Business Secretary as saying in essence that finance houses are stating that they are offering funding but small firms aren’t interested, but that isn’t right. Mr Cable goes on to say that the bar has been set too high and no one is prepared to jump. This is in response to the fact that the finance houses are putting interest rates high and forgetting about this as a factor in the lack of takers for their business finance deals. For a small organisation that is getting short of cash because of an outstanding account with a large organisation this could well feel like a catch 22 situation. If after getting hold of the large organisation they don’t get a suitable response they could feel that their only hope is Debt Collection to try and get the account cleared. Not surprisingly, if the small organisation used RBS or Nat West then they could have been given financial support as these are state funded finance houses, but even so these finance houses will still examine the trading viability when assessing any applications for business loan facilities, so getting this account paid is a priority.

The directions that are available for Debt Collection are really one of the typical directions such as Debt Collection Agencies or legal practices which specialise in business Debt Collection, or a more personal path of Debt Collection Software. As cash is a significant factor in the decision for the small organisation, this could rule out Debt Collection Agencies and legal practices as their charges are in the range of 10% to 20% or more of the account value. Debt Collection Software on the other hand can cost around £40 for a decent package. There are some other significant details on the financial side, in that the Debt Collection Agencies and legal practices deduct their fee from the account after recovery, whereas usually the Debt Collection Software would have to be paid for, unless it was obtained though a credit supplier. Also, the Debt Collection Agencies and legal practices will charge for each debt they manage whereas the Debt Collection Software is a one-off purchase and can be used as often as the small organisation likes with no more charges to pay.

Using Debt Collection Software will require that the small organisation nominates use the Debt Collection Software package and also to compose the Debt Collection letters. As it is likely that the small organisation has little or no experience of Debt Collection they could well depend on the user guide that comes with the Debt Collection Software. This should provide them with a clear explanation of how the Debt Collection procedure works and the important role played by Debt Collection letters. For these Debt Collection letters the user guide should explain any current laws that can be used and also any good snippets as used by Debt Collection Agencies that could help to encourage the large organisation to pay the outstanding account quickly.