In the 19 years since our client founded their bespoke furniture business, they have become accustomed to late payment being part and parcel of trading. It wasn’t until reaching out to Advocate Commercial Debt Recovery they realised prompt payment is a right and not a privilege. Their carpentry services now include fitting bedrooms, kitchens, and home offices, with sales split 50/50 between trade and retail. Their customer was a luxury home builder operating in the southern counties. Having worked with the debtor on and off for the last ten years, our client knew to expect payment up to 60 days late. This job involved producing and installing bedroom furniture for a pair of newly built mansion-sized homes. When buyers are paying upwards of £1 million for entry-level abodes, the £47K of furniture contracted to our client is almost an immaterial sum. To cover the cost of raw materials, a 50% upfront payment is required before such homely lavishes enter production.
Coming Out of the Woodwork
In accordance with our client’s usual level of excellence, the furniture was installed on time and without any defects or blemishes observable to discerning eyes. The debtor raised queries after invoicing in line with their normal behaviour. Historically this has been attributable to the debtor’s own lack of internal communication, and it was no different this time. Unusually, the debt ran past 60 days overdue with only a £3K payment on account to show for our client’s efforts. This gave way to long lag times between the client asking for payment and the debtor producing a narrative to either dispute or kick the can further down the road. For the next 300 days, our client carried £22K unpaid work on their books. Cautious about believing the industry rumour mill, our client saw mounting evidence suggesting other suppliers were in a similar position and contractors were leaving en masse. With that in mind, Advocate were engaged to recover payment, which is exactly what we achieved.
Payment Out of the Closet
We knew the debtor was purporting to have queries outstanding. We also knew the client had previously dismissed all their excuses. Our initial investigation of the debtor revealed a precarious financial position outlined in their last set of accounts. The financials and County Court Judgments raised concerns over the debtor’s solvency – whether they still had it. Appropriately, Advocate issued a Notice of Insolvency Proceedings. As expected, the debtor produced their list of excuses, albeit titled as disputes! A swift response from Advocate using the dismissal our client had already provided was sufficient to prompt payment of the £22K and statutory late payment charges. This was a straightforward debt recovery case for Advocate. The difference Advocate made was to put substance and urgency behind the client’s repeated demands for payment. When faced with the reality of court or insolvency proceedings through the backing of Advocate Commercial Debt Recovery, there is no cause to doubt a creditor’s intention or ability to follow through. In cases like this, payment is the inevitable outcome.