When a small firm has finished projects for a large firm over several years and has always had their invoices paid on time, it might come as a let down to see that their latest invoice is still overdue after the agreed payment date. Having worked with the large firm for some time, the small firm will no doubt, have built up a good working relationship and will guard this and not wish to see it ruined by hasty action. But the small firm needs to have the invoice paid and they might know that the large firm is still trading and so they should be able to pay it, from their outside view that is. They will contact the large firm to discover what is reply to this contact will help the small firm to know what their next move will be. If the response is not to pay the invoice right away, or by a date then the small firm might decide to think about Debt Collection. They might be aware of the accepted Debt Collection methods, i.e. solicitors and Debt Collection Agencies and consider them if the large firm doesn’t pay the invoice at all then the small firm might want to take them to court. They might see these solicitors and Debt Collection Agencies as their only chance of achieving this objective, if the Debt Collection activity takes them as far as that. What the small firm might not realise are the charge rates that solicitors and Debt Collection Agencies use, which can be in the region of 10% to over 20% of the final invoice value, usually payable on collection. This might not include expenses in some cases and assuredly would not include court costs.

Depending on the invoice value, the small firm might be better to assess Debt Collection Software as a different strategy, since the costs for a Debt Collection Software suite can start from ?40, so it could be a useful starting point. Since the Debt Collection Software would be used internally, the small firm would need to appoint their own resources to manage it and also to generate the Debt Collection letters. These are at the core of the Debt Collection activity and need to be generated carefully and look professional. The Debt Collection Software should include a documentation which can lay out how the Debt Collection activity works and how their Debt Collection Software suite is built around this activity. The documentation should also provide information on how to generate these Debt Collection letters, such as any current laws that they can use and any useful paragraphs that Debt Collection Agencies use to convince clients to pay up. The main thing is that the Debt Collection letters should use normal wording and not go into emotional language, but stay to the point.

If the small firm fails to get payment of the invoice by the Debt Collection letters activity and needs to consider court then which court they go to depends on the value of the claim as follows:
?5000 and below it is the Small Claims Court where each party represents themselves and there is rarely an award of costs to the winning party.
Over ?5000 and up to ?25,000 claims are handled in the Fast Track of the County Court and for complex cases and all cases over ?25,000 are handled in the Multi Track path of the County Court. These two courts usually need proper legal representation so these costs will need to be considered before proceeding.

So Debt Collection Software might indeed be useful to take the small firm all the way to the Small Claims court and in many ways it will be useful since the Court Officers will want to see evidence of prior work done in the Debt Collection activity before they allow the case to be heard. The Debt Collection Software should be able to record all of the key activities and then provide a printed report on request that would suffice, at a cost substantially cheaper that solicitors or Debt Collection Agencies.