The haircuts refer to reductions, which are drafted by the European regulators, to be applied to the national debt burden of certain member countries. These haircuts will be applied in the stress tests that banks must take to assess their ability to withstand a further financial crisis. The haircuts are in effect reductions off the member countries debts, which would assist them to repay the ensuing debt. The proposals are that Greece government bonds will be reduced by 17%, Spain by 10% or 11%, UK similar to Spain, France by 6% and Germany by 4% or 5%. The facility of governments to repay national debt is surely linked to their national banks ability to withstand a new bad economic situation and so where banks have to set aside reserves to be resistant against the effects of a new bad economic situation, this could mean that they have not much funds available to lend to small firms. It could also mean that income from investments and savings could be reduced, which could affect large firms which rely income from investments.

This could make the large firm delay clearance of the bill from the small firm, but from the side of the small firm, this is not viable since they will have done work or provided products and now need to be paid. They would obviously communicate with the large firm to learn when the bill is to be paid, but if they didn’t get a satisfactory answer then they could well feel that Debt Collection proceedings was their only way of getting paid. This would be true especially if they had been unable to get a business loan from the banks, but this could also mean that their reserves for the Debt Collection operation were limited. The traditional Debt Collection services of legal practices and Debt Collection Agencies tend to charge around 10% to 20% or more of the bill value, rather than a fixed price. This could well be a large chunk for the small firm to pay out and so they could well decide to look for a cost effective Debt Collection solution. They could then locate Debt Collection Software, for which ?40 can buy a decent Debt Collection Software suite. Naturally the small firm will need to work out how to resource the Debt Collection Software as they should learn about how the Debt Collection process works and then assign people to take on the various responsibilities. In order to learn about the Debt Collection process, it is best to look into the documentation or on-line help that comes with the Debt Collection Software suite. They may expect to find information not only on the Debt Collection process but also on how to write Debt Collection letters, such as what pertinent Acts of Parliament is there that can be used and are there any good snippets that Debt Collection Agencies use that can be made good use of?

The small firm should be able to persuade the large firm to settle the outstanding bill and for the small firm this will be achievable at a much lower cost that if they had used legal practices or Debt Collection Agencies. Also the small firm will now have the Debt Collection Software and the talent to use it for any future Debt Collection operations that come along and at no extra cost, whereas the legal practices and Debt Collection Agencies would charge their fees for each and every Debt Collection operation that they take on.