Case Study - Debt Recovery
Our consultants were contacted by a Director of an electrical maintenance services company, who needed assistance with his company’s cash flow. Upon a quick review, we identified that many of his debtors were outstanding for over 60 days.
We advised the company that they had to improve their debt recovery as it was causing problems with their cash flow.
We firstly reviewed their internal processes. We identified that many of their employees neglected to maintain proper documentation, causing difficulties when customers questioned their invoices, as there was insufficient documentation to substantiate the work done.
We then suggested to the company that any accounts that were still outstanding for 60 days should automatically be referred to a debt collector. We were able to source a local debt collector with a very competitive commission fee structure. The debt collector was only paid once the debts were collected. This freed up time for the company’s Director and credit manager from chasing down the outstanding amounts and distanced the Director from the customer. The Director was able to justify to the customer that it was standard procedure for accounts over 60 days to be referred to a debt collector, as it was done across all accounts.
We also assisted in the company engaging a solicitor in pursuing a large debt which needed a more aggressive approach, due to the nature and age of the debt. The solicitor was able to issue a statutory demand and subsequently make an application to wind up the debtor for a very competitive price.
After the company implemented the above procedures, it was able to get back on top of its accounts receivables and have a healthier cash flow.
Rated 5 out of 5