Recruitment Fees of £28K in just 4 Days

Our client has fast established themselves as one of the leading engineering and construction recruitment consultants in the home counties. Such is the highly skilled nature of the vacancies they fill, most roles fall within the higher rate tax bracket for earnings. Our client was able to fill 3 more vacancies for their customer, a prestigious Buckinghamshire based construction firm.

One of the reasons for our client’s success is they value the commercial relationship as much as the revenue it generates. Sourcing potential candidates in anticipation of demand help provide the high-level service and quick turnaround their customers have come to expect. Our client and the debtor had worked together previously and although payments had traditionally been late, it was unusual for a debt to remain outstanding this long.

Those Who Forget History…

The construction industry is known for its network of supply chains and the challenges in getting payment to filter through. The unexpected liquidation of Carillion in January 2018 sent shockwaves through the construction industry. A seemingly solid and viable business leftover 30,000 suppliers unsure whether they would get paid, pushing a number into insolvency themselves. Whilst the majority of construction firms are viable well run businesses, it is difficult to forget history at the risk of repeating it. In this case, our debtor appeared (and remains) on paper a financially resilient business. Having dodged the Carillion fallout, the client was naturally mindful.

Giving Grace

In the months leading up to Advocate’s instruction communication had started off good before petering out. When the invoices first fell due, the debtor advised they were working on a high-value contract that required an exceptional amount of capital to be used for labour costs. If the wages could not be paid, the flow of payment from the end-user would stop. A further month grace period was given bringing the time frame to that of previous late payments. The deadline lapsed and the debtor stopped responding. The invoices averaged 127 days overdue at this point.

Crossing the Line the Right Way

Having worked with the client for more than 2 years, Advocate was the natural-sounding board for a steer on how to proceed. Upon instruction, Advocate Debt Recovery issued a notice by post and email. In addition to the communication details provided by the client, Advocate were able to obtain other contact information spreading a wider email and telephone net. On receipt of the notice, Advocate were advised of the debtor’s intention to pay on what would be day 7 of the debt recovery process. Communication remained amicable and full payment was received several days earlier than promised on day 4. The full £28K of recruitment fees was received and forward to the client the same day. The Statutory Late Payment charges of £2K were also paid by the debtor with wishes for a good weekend being passed to Advocate and the client. Cases like this achieve the maximum result whereby client and debtor continue to be valued and appreciated by each other, not just through payment. The debtor could understand why action was taken, and appreciate the manner in which it was communicated.