Interesting collection history from one of the recent successful debts collected by Sterling.
One of our long term clients, a top UK accountancy firm, passed us a debt where one of their long term clients (using their services for the past 20+ years) began persistently paying late. The debtor had been asked on numerous occasions by the credit control department to pay, several times had actually made promises to pay, which were then never realised. Our client felt the situation was recurring too often and despite the reminders from the credit controllers and warning of escalation to debt recovery plus the promises to pay, the payment was still not forthcoming.
What’s interesting here is that more often than not, once a debtor is escalated to debt recovery, they suddenly want to pay the invoice, but dispute having to pay late fees and interest charges… for some debtors it seems to be the point they are waiting for the problem to reach, debt recovery, before paying. What’s important is once the creditor makes the decision to escalate, that they stand their ground. Best of all is for the creditor to refer all contact from the debtor regarding the escalated invoices back to our recovery agent. This greatly assists us in collecting the full amount of the debt including any late fees and interest charges, and avoids a ‘cry wolf’ approach to the situation from the debtor. There’s where the end to late payment from the customer is established for good. When addressed correctly, you can retain your business relationship and it will grow stronger, that client will pay YOU on time in future and likely think twice when delaying payment to any other creditors they may also have too.
This debt involved 5 different entities, each billed to the same debtor: two limited companies, 2 settlement trusts and a personal individual bill.
The total amount overdue was c. 11,000 pounds from Q1 this year.
A week after escalation to debt recovery the debtor understood and agreed to pay the full invoice amounts, plus late fees and interest where applicable and continues to work with the UK accountancy firm moving forward. Our win fee commission for this recovery was almost completely covered by the debtor paying late fees and interest on top of the original invoice values.