Local firm successfully recovers debt with help from White Label Resources

The Challenge

A local firm turning over £675k requested our assistance with a single debtor owing £9k that was 11 months overdue. Despite several attempts to successfully recover the debt, they had only been paid £1500 in the whole period.

The Services

We firstly qualified the firm to ensure it was solvent and had no CCJs or other adverse against it. The firm appeared to have some creditworthiness and the debt was undisputed. There was all the relevant paperwork in place and the invoices had been raised to the correct entity. Initial contact by WLR was unsuccessful, so a ‘Letter before Action’ was sent, confirming fees and interest and that a response was required within 72 hours. Within less than 20 minutes, WLR received a response from the firm and they agreed to pay £2500 immediately.

WLR negotiated that the remaining £6500 would be paid in two instalments over the next two months. This was confirmed in a formal agreement that included a clause with a Personal Guarantee. Before both payments were due a ‘phone call supported with a confirmation email was sent to the debtor from WLR and the total outstanding amount was cleared in accordance with the agreement.

The Results

Not only was the debt successfully recovered in full but during this process the client requested a review of their ledgers.  This highlighted various issues that they had been unaware of, including that they were invoicing two companies to the wrong legal entity and all customers were trading over their credit limits that had been set initially.

We helped revise credit limits and payment terms and new terms and conditions were generated along with an improved work flow for taking orders and producing invoices etc. WLR now chase all debt remotely in the clients’ name and whilst the end clients took a short time to get used to the new way of communicating and the payment expectations they have all fallen into line and Debtor Days have reduced from 78 (excluding the original Debtor) to 51 in 6 months.