Painless Debt Recovery of £17K in 24 Hours

A janitorial equipment supplier in Bolton instructed Advocate Debt Recovery to recover payment of £17K for invoices that were between 1 and 57 days overdue. Their customer based in south-east England provides commercial cleaning including washroom and grounds maintenance.

When agreeing on credit terms with a new or existing customer, the phrase ‘30 days nett monthly’ comes to mind and is largely the standard for most supply chains. In some industries, standard payment terms are as short as 7 days, and in others, it can be 90 days or more from the end of the month. In this case, our client had extended credit terms beyond what they would normally agree for a new account. The debtor had been trading in excess of 20 years with a respectable credit rating and financially resilient parent company. This gave reassurance of both the debtor’s liquidity and longevity making extended credit terms easier to justify. Terms of 60 days were subsequently applied and the Finance Department was given a mandate of keeping a close eye on both debt age and exposure. At Advocate we are very much aware having a good credit rating & impressive balance sheet is no guarantee of being able to pay debts as and when they fall due.

Not a Blame Game

In the run-up to Advocate’s instruction, a mixture of responses were received from the debtor. The ‘next payment run’ came and went, as too the one after that. At one point the debtor attempted to complain they were being chased for payment but still could not provide a remittance date! As a long-standing client, we know them to have an efficient and tactful accounts receivable team. Further communication revealed the debtor had lost the contract for which the £17K of products had been ordered. Whilst sympathetic to any loss in revenue, the supplies could still be used on other contracts. The client and products supplied had no bearing on the contract being terminated. Our client was effectively being penalised for circumstances outside of their control.

Due to competitive pricing within the industry, margins are small. Finding the right products at the right price for the right job can make or break profitability. Setting up an account with our client ticked all the right boxes. With the contract lost, there was no need for the debtor to order from our client again and even less incentive for making payment.

All in a Good Days Debt Collection Work!

Suspecting the debtor had the means but not the motivation to pay, Advocate were instructed. On Monday afternoon a notice was issued a warning of possible insolvency proceedings and the consequences of a Winding-up Petition. On Tuesday afternoon full payment of £17K was received along with payment of the statutory late payment charges. Another successful debt recovery on behalf of our client. It certainly reinforced the urgency and motivation Advocate provides to facilitate payment…in this case, it only took 24 hours to fix a 57-day problem!