Diamond Debt Recovery

At Advocate, 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 mull spending five figures on tetrahedrally arranged carbon atoms, 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 and declined. Waiting another six months to receive payment of £12K, 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 all round 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.