At Advocate Commercial Debt Recovery, we are fortunate to see most industries and sectors grace our case files each month. This case saw a custom furniture maker trade with a group of diamond jewellery stores. You won’t find anything generic or mass-market in either business because they cater to the upper echelons of society, the 1% of wealth, if you like.
Having initially quoted for a higher volume and passing on the benefits which come with economies of scale, the debtor advised at the point of order that less was more before reducing the production volume by 50%. This late call left little headroom for increased costs or payment delays. Having delivered the bespoke handcrafted seating on which wealthy clientele relax and spend their money, our client rightly expected prompt payment.
Under Pressure
For six months, our client tolerated communication delays, accepted apologies, and pushed back queries. There are limits to patience and how many times the spec sheet can be questioned after being signed off. Some dialogue about the legal entity invoiced was genuine but amounted to nothing more than the difference between Ltd and Limited. Upon instruction to recover the £12K, Advocate attempted to make contact with the jewellery store’s head office, who at first resisted. Out of the blue, and seemingly to avoid the statutory late payment charges, the debtor made direct contact with the client and proposed a payment plan lasting six months. Once rebuffed, Advocate established dialogue with the Finance Director. We were informed that despite opulent appearances and, like most retailers, high-street footfall was posing a cashflow challenge for the business.
At first, the same payment plan was proposed, but it was declined. Waiting another six months to receive payment of £12K, which is already six months overdue, is not reasonable by any standard! As a general rule, as debts age, there is less and less scope for the creditor to entertain a payment plan of any duration. After a lull in communication, the debtor’s motivation increased with the Final Demand. Through negotiation, we managed to get an all-around agreement for payment over two months instead.
Reflection of Payment
Before the first instalment could be received, the Finance Director communicated a wish to get out from under Advocate’s spotlight sooner rather than later. We agreed that in return for a token reduction of the increased statutory late payment charges, payment of the £12K and remaining charges would be made the same day. Sure enough, payment arrived courtesy of several bank transfers from different stores, with the client receiving full payment by the close of business. This was another successful debt recovery by Advocate.