Advocate has recovered payment of an £8K debt spanning eight invoices up to 90 days overdue on behalf of a specialist subcontractor. Our client makes a living out of being able to repair any surface damaged during the construction of homes and offices. They restore anything from brickwork blemishes to tarnished tiles making sure the building’s first inhabitants move into immaculate premises. Such is the balance of skill to materials; labour makes up over 95% of the invoiceable value. Non-payment can quickly compromise making payroll, and when that happens, management has no option but to offer other customers early settlement discounts in a bid to bridge the cash-flow gap.
History & Insight
In stark contrast, the debtor’s most recent set of accounts shows they are cash-rich, having taken on six high-end residential construction projects last year. Both client and debtor have enjoyed a prosperous relationship over the years. The lengthy trading history has fostered a level of patience not afforded to any other customer. With invoices submitted, our client spared their director an afternoon of line-by-line review with the debtor’s QC team. From that point on, payment was promised on several occasions. Shortly before Advocate’s instruction, our client had sight of an internal email to the Accounts Payable team suggesting a backlog of supplier payments and encouraging more communication. Email correspondence also confirmed all eight invoices had been approved four weeks prior, with the client now being on the shortlist of priority suppliers.
Excuse Ping Pong
Having worked with Advocate previously, the client knew that where possible, we preserve rather than destroy their customer relationships without compromising on urgency. This case was one of many such examples where both client and debtor have gone on to resume trade, albeit with more of an eye on making sure invoices are paid to terms. Upon instruction, the first excuse was QC needed a line-by-line review which we quickly dismissed as having already been achieved by the director. When the debtor claimed invoices were still pending approval, we reminded them this was not the case. Vague payment promises were met with insistence on a precise date. When informed the invoices would be paid on receipt of payment from another contract, the debtor was reminded of our client’s priority supplier status.
Never in Doubt
Our dialogue with the debtor spanned from clerk to senior management levels and gave us an insight into how the business operates. They are a prime example of a company having the money to pay but not necessarily the resources to process payment. We were able to make our client’s invoices their biggest priority. With additional statutory charges levied in the Final Demand, payment of £8K and late payment fees were swiftly received. Our client has since received reassurance that next months invoicing will be fast-tracked to avoid future invention by Advocate.