Debt Recovery of £250k in just 7 days!

Advocate has a broad range of clients operating in just about every sector of British industry and has recently recovered £250k for a long-standing client in just seven days. The debtor, in this particular case, is a UK-based freight forwarding agent working with air and seaports to ensure customer goods are imported or exported using the most reliable and cost-effective methods. With strong financial results and significant profits, the £250k owed to our client sat amongst other similar liabilities. As an international freight operator with planes, trains, cargo ships and HGVs in their fleet, the £250k sat in the lower quartile of our client’s debtor ledger. At Advocate, we know debt is relative to its environment and apply the same urgency to £2k as we do £250k!

Although incorporated over a decade ago, the debtor was still in their first year of trade with our client, who rightly got nervous and instructed Advocate when Accounts Payable became unresponsive.

Illogistical Thinking

Upon instruction we saw the £250k was made up of 40 invoices spanning six months. A closer look at the trading history identified a pattern of 2-3 sequential invoices being consistently missed off the payment run each month. Despite previously having received all the invoices on a couple of occasions, the debtor immediately went to our client seeking them again. This is a textbook ploy to try and evade the statutory late payment charges to the point of trying to seem oblivious to there being a payment issue in the first place! Naturally, our client rebutted the debtor and reaffirmed they needed to deal with Advocate. Shortly after, the debtor elected to work with us and not against us. We had copy invoices waiting for them as the request from Accounts Payable came in. A change of staff was blamed for the silence our client had faced in recent weeks. In the coming days we worked with the debtor and client to resolve queries about purchase orders and fuel surcharges. As for the sequential invoices missed, Advocate established this was because of a mismatch between the drop off location code and the site prefix. Although the exchanges were time-consuming and befitting of a poorly managed Accounts Payable, they served to highlight training issues which had prevented our client from getting paid.

Signed Sealed Delivered

By day four of our action, the debtor had made a £100k payment on account to help alleviate the client’s concerns and paid the remaining £150k by CHAPS on day seven. This was another successful debt recovery by Advocate. The statutory late payment charges of £250k quickly mounted up but were kept relatively tame to avoid them becoming a barrier for payment. The debtor had no issue in settling the late payment charges, even noting how reasonable the fee was compared with other debt recovery firms they had engaged with!