The Budget of July 8th 2010 did contain elements that will help small firms, such as these as copied from the Directgov website:
• Capital Gains Tax – the 10 per cent CGT rate for entrepreneurs will rise from £2 million to £5 million
• Corporation Tax – the small profits rate of Corporation Tax will be reduced to 20 per cent from April 2011
• National Insurance – the threshold at which employers start to pay National Insurance will be raised by £21 per week above indexation in April 2011
• National Insurance – new businesses outside the Greater South East will be exempt from up to £5,000 of employer National Insurance Contribution payments for first ten employees hired
• Enterprise Finance Guarantee – EFG increased by £200 million to support £700 million of additional lending until 31 March 2011 – the EFG supports lending to small businesses that find it difficult to get normal commercial loans
The EFG in particular may help a small firm that is getting short of cash and has to do something about the overdue invoice with the large firm. The interest rates that some financial institutions charge for loans to small firms may well be far higher than the EFG charge so it would be well worth approaching the EFG if needed. However, the small firm would obviously make contact with the large firm first to get to the bottom of when they propose to pay the invoice and if they didn’t get a positive outcome then they may well start to think about Debt Collection proceedings. If the small firm is not short of cash then they may well simply go with a usual Debt Collection service such as lawyers or Debt Collection Agencies, but if not or if they are simply looking to save revenue then they may well look at Debt Collection Software. Where lawyers and Debt Collection Agencies handle the whole Debt Collection project for the small firm, Debt Collection Software means that the small firm has to handle the Debt Collection project with their own resources. These differences are reflected in both the prices and the resources required, where lawyers and Debt Collection Agencies charge around 10% to 20% or more of the invoice value, a decent Debt Collection Software system costs around £40. With lawyers and Debt Collection Agencies the commitment required by the small firm will be minimal, whereas with Debt Collection Software they will have to assign their own time and resources to run the Debt Collection project.
When assessing the Debt Collection Software applications, the small firm should look at the manual to see if there is a help guide for Debt Collection that will aid them to get to know how the Debt Collection activity works. They will also need to see that there is specific help for creating the Debt Collection letters since these are at the heart of the Debt Collection activity. They will also benefit from advice on what appropriate laws are available that could help them to encourage the large firm to pay the invoice. Also any useful sentences that Debt Collection Agencies make use of would help when creating the Debt Collection letters, to make sure that the large firm does pay the overdue invoice. The small firm would then have the ability to use the Debt Collection Software if any further overdue accounts come up at a later date, and more economically than either lawyers or Debt Collection Agencies.
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