Based in the East Midlands and operating throughout the UK, the creditor specialises in vocational training for the extractives industry, including blasting operations, drilling operations and mining operations. Established in 1983 and after 37 years of successful trading, this was the first time the creditor had found themselves in a situation where their own robust credit control process had failed, and they were considering taking debt collection action.
For most well-run businesses, debt recovery is an internal process, and the need to instruct a third party is rare, so when faced with this problem, many companies will be unsure what to do next. That was the case with the above creditor. They had been chasing for payment of an invoice issued some six months earlier, and despite the frustration of failed promises of payment and then being ignored, they remained reluctant to take further action. We explained how the process works and what to expect during the initial enquiry telephone call and answered the creditor’s questions. The client advised us that they were happy to go ahead, and we received the client’s completed instruction form and a copy of the unpaid invoice later that day.
Internal Process Exhausted
The debtor, a conglomerate with worldwide offices and operations, had ordered 13 personnel to attend a Mineral Sector Safety Passport course. The course was duly delivered on the date booked, and each attendee was issued the relevant Passport on successfully completing the course. Our client issued their invoice on 30-day payment terms using the invoicing details entered on the booking form and completed with the purchase order number given with the order.
At the end of the month, a statement of account was sent to the debtor. As soon as the invoice became overdue for payment, our client wrote to the debtor and followed this up by telephone and email. This process was repeated at the end of the following month, and payment was promised again for the next week. This went on for four months, each time payment was promised, and each time payment never arrived. The debtor’s accounts department then decided to completely ignore our client for the next two months.
Credit Rating Gives Confidence
Upon receiving our client’s instruction, we carried out initial financial checks on the debtor. What we found was encouraging: a credit rating of 97/100 and a credit limit of £15,000,000. From a debt collection view, the larger the company and the higher the credit rating, the more confident we were that we could recover payment quickly. We issued a Notice of Court Proceedings by post that afternoon and sent copies of the Notice by email the next morning.
Full payment, including the late payment charges that make up Advocate’s fee, was received to our bank account 5 hours after the Notice was sent by email and within 24 hours of us commencing action. The entire principal invoice balance was transferred to our client 12 minutes later via a same day faster payment, and our client confirmed receipt of payment 30 minutes later.
Large companies with shareholders and investors and good credit ratings to protect will, in most cases, respond immediately to our action and the possibility of Court action. It may not always result in a next-day payment. However, a positive response and an assurance of payment or a payment date are almost guaranteed.