This debt is slightly unusual in that Advocate Commercial Debt Recovery was aware of it before a valid invoice was raised. Our client introduced it as a high-pain, low-value debt. Debts are of course relative to the size of the business and many would deem £2.4K, a high value. In this case, our client is a well-established national training provider for utility mapping and surveying courses. They also provide access to accreditations and continued professional development. Tools like automated invoicing help the client put more resources into training, which remains their primary motivation for being in business.
Our debtor is a civil engineering firm undertaking infrastructure projects across the UK and Europe. This was also a low value but no pain transaction in their eyes. Employees received training and achieved entry into the Energy & Utility Skills Register. In large organisations with stakeholders dotted up and down the country, an invoice can easily get overlooked. There has always been a need for business systems that complement each other and function across different departments. In the 1990s, when the Y2K/Millennium bug became a prominent threat, many firms took the opportunity to update their entire IT infrastructure. In the past 30 years, Enterprise Resource Planning (ERP) has progressed to the next level owing to advancements such as fibre-optic, 10 Gigabit Ethernet, and OCR (Optical Character Recognition). The concept of issuing and receiving invoices electronically with minimal human intervention is now a reality. Given the sheer number of invoices the debtor handles, they use just such a system, which is where the challenge for our client starts.
Unexpected Rejection
To enable the successful scanning of invoices onto the debtor’s ERP, specific headers and information in predetermined places are required. For some suppliers, this means investing in a new invoice template through IT development. With all previous training being paid to 14-day terms, our client assumed all was well. Unbeknownst to them, the debtor manually overrode the scanning by keying in the data. Jaws hit the floor when the £2.4K invoice bounced back as not compliant. The rejection did not say what changes were needed but did state payment would be made within 14 days of a compliant invoice. When talking about a live case for a different debtor, the client vented frustration on compliance before introducing Advocate to the situation. A small box our client had unwittingly ticked several years ago allowed compliance to be enforced, seemingly without notice. Through an unrelated commercial decision, our client had already decided to cease trading with the debtor, and the £2.4K was to be the final transaction. There was no appetite to invest in a new template that would be obsolete as soon as the invoice was generated. The client reverted to some good old-fashioned trial-and-error word processing. Knowing Advocate has eyes for detail, a couple of versions were sheepishly submitted for unofficial compliance checking!
Double Standards
The new invoice was submitted, scanned and deemed ERP compliant. Contrary to the previous rejection, payment was not received in 14 days. The client chased for several weeks, receiving little feedback. Advocate were then instructed to collect the debt we’d known about a month before the ERP system recognised its very existence! Within 24 hours of Advocate commencing action, a remittance was received for the £2.4K, and funds were received shortly after. The statutory late payment charges invoice raised by Advocate was promptly paid despite not meeting the rigorous compliance criteria our client was unexpectedly subject to. When faced with Advocate and the reality of court proceedings, debtors are often able to achieve what clients had been told couldn’t be done. This was another successful commercial debt recovery by Advocate.