If the small company who completed the project is newly formed then they will be keen to get established in the business area they are in. Whether they are newly formed or established, when presented with a large company who are reluctant in settling their invoices, the small company will need to try and get them to pay in full, while at the same time keeping the door open for further work.
A new company may well have been set up with help from government agencies such as Business Link, who would have given them full information on running their business including debt collection, so they should either consult the information pack or go and talk with Business Link before they do anything else. An established company may have been put into this situation before and may have a Debt collection strategy in place. Also, there is legislation in place to help small companies in debt collection from larger companies in the form of the “Late Payment of Commercial Debts (Interest) Act 2002”, which authorises the small company, i.e. the creditor, to make a one off charge against the large company, i.e. the debtor, for an unpaid bill, as well as this they can also charge interest on the outstanding debt. The creditor has the choice of not making these charges, but it should be a wise move to try and agree with the debtor that this should be part of a renegotiated contract, so that both parties have agreed that payments will be made on time and there will be no need for a debt collection process.

Not withstanding advice from Business Link, a new small company might wish to consider three choices for debt collection; visit a solicitor who specialises in debt collection, locate a debt collection company in the area, or finally investigate Debt collection software and do the debt collection themselves.
These three choices are also worth thinking about for an established company, which has a debt collection strategy, in case they wish to revaluate their procedures.

Taking on the services of a solicitor or debt collection company may be costly for a small company, as they are paying for the expertise of each party in the hope that they will be successful in recovering the debt, creating Debt collection letters that may work first time. The positive side is that they would not require much time from the small company, who can be left to get on with their jobs while the other party contacts the debtor for settlement.

By doing the work in-house, the small company has to make adequate resource available if they want to be successful and so the worker using the debt collection software should really have some expertise in the legal aspects and also have a good standard of spoken and written English. This latter skill is needed when creating debt collection letters as these can be so vital in the debt collection strategy as they form a major part of the record of transactions between creditor and debtor. The positives are; the small company is in control of the debt collection strategy, they pay a one-off price for the debt collection software package, and it is reusable for future debts at very little cost.