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Sole Trader Debt Collection

Our client is a sole trader highly skilled in fabricating bespoke components out of aluminium and exotic materials. With over 30 years of experience as a manufacturer and subcontractor, their customers include firms in the aerospace, automotive and electronics industries. With a range of different Computer Numerical Control (CNC) machines, most of their revenue is generated by referrals from existing customers. The debtor based 200 miles away in Hertfordshire, designs and installs power supply systems in the UK, Middle East and South Asia.

The national lockdowns in 2020 squeezed supply chains feeding secondary industries. When presented with an urgent order, our client went to great lengths to source the raw materials at a price conducive to the rigid budget. Having produced 22 items using CNC machining with hand finishing, an invoice was raised for £3.8K and was 1 year overdue on Advocate’s instruction. Even with the Government taking unprecedented measures to ensure that businesses were financially supported during the height of the pandemic, the debtor was not faring as well as expected. It is difficult to find a business that has not been affected by the pandemic, and our client is no different. As a sole trader, obtaining sufficient financial support from the government schemes was less attainable.

A token interim payment was received 9 months after the invoice was raised. Our client had hoped for other payments before communication dried up in the subsequent 3 months. Having weathered the economic downturn almost singlehandedly, our sole trader client could not allow the payment drought to continue. Advocate Debt Recovery was then instructed.

Making an Impact

As Advocate has witnessed from the pandemic’s onset, the burden of late payment sent shockwaves both upstream and downstream for suppliers and customers. The Government’s guidelines remain that businesses of all sizes should pay their invoices within the agreed payment terms or sooner where possible. In reality, the suppliers who get paid first are the ones who make the most noise and have the biggest impact. It took less than 24 hours for Advocate to have an impact. Our initial communication with the debtor revealed new business was almost at a standstill, and payment plans with end customers were generating a low monthly yield. The debtor had previously told our client without elaborating that cash was tight. Assurance was given of an impending cash injection from a sister company in South Asia. The debtor had previously told our client without elaborating that outside funding was being sourced. With very little detail the narrative was open to interpretations such as crowdfunding, bank loans, private investors, venture capitalists to name but a few.

With the client also willing to entertain a payment plan, the debtor’s expectations were quickly directed away from a lengthy time frame. Most payment plans that Advocate administers are for weekly instalments, but the nature of the debtor’s industry and aftermath of lockdowns made fortnightly payments acceptable. With the client in agreement, all 3 instalments were received on schedule over 28 days ending 12 months of uncertainty. The statutory late payment charges which make up our fee were paid in parallel with the fortnightly instalments. Whether your business is still being battered by the financial storm of Covid-19 or has nearly recovered from the economic downturn, it is never too late to instruct Advocate Debt Recovery and make your case our priority.

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