An accountancy firm who had been reluctant to use debt recovery before wanted to be guided through our business debt recovery process and to know what to expect along the way.

As with any business decision, engaging a debt collector can seem daunting at first. Partners in accountancy firms are particularly cautious when it comes to their reputation.

Earning and losing money through time

The firm used a debtor who offered a payment plan that they weren’t happy with, to trial our service and approach with. They decided to use our experience to attempt collecting the debt on their behalf with a certain goal in mind. One of the frustrations for accountancy firm partners is using their time to chase payments on completed work. In reality, they are reducing their earnings by spending additional time chasing the money they have already worked for. This was mostly the reason why this accountancy firm was trying our service to assess the effectiveness of implementing us into their normal dunning process.

Decisions not to be taken lightly

The debt mentioned in this example was from a small business owner who had run up a bill with his accountancy firm. Our client (the accountancy firm) had spent far too much time negotiating payment plans which were never properly adhered to by the debtor. Due to this and a few similar situations with past debtors, the partners decided to look at implementing a procedure to deal with persistent late paying customers more efficiently and were recommended to approach us. There was a clear emphasis made on the need to operate in a professional manner to protect the reputation of their firm, we were accustomed to this request from existing accountancy clients. For several firms, this is one of their strongest motivations to work with us. Knowing that we understand the importance of protecting their reputation and have practical experience in doing so, this is key to them comfortably engaging our service. We can often collect in such a way that the relationship with the debtor is retained, this is particularly important when the firm is dealing with multiple entities owned by an individual, when only one may be late paying.

Getting the ball rolling

Once the firm had provided details of the debt our collectors had an initial discussion with them explaining the process and asking that any further calls or communication from the debtor be referred to Sterling. This removed the firm from having to spend time on awkward conversations about payment with their debtor.

Time-saving results, no upfront costs or risk

Within one week of passing us their debt we had collected the total amount outstanding in one payment, there was no need to discuss payment plans any further. This was the first positive result (cash) and our client could see the immediately obvious advantages (saving time and hassle) implementing the service moving forward. Furthermore, we continued to detail, explain and pursue the debtor for the late payment fees which were due to our client in line with the Late Payment Act. Two weeks later and we had recovered all of the late payment fees permissible to the full extent of the law, from the debtor.

Total time of collection 3 weeks, full debt amount plus late payment fees collected without any upfront fee. Our ‘no win-no fee’ commission was effectively covered in full by the debtor.

Decisions left to be made

Establishing when to pass debt to recovery must allow for a degree of flexibility, the partner needs to take into account several factors before doing so. A key rule to consider however is that the longer a debt remains unpaid, the more likely that it will never be paid.

For this firm, they now have an established route to process any debtors. When they find they are losing money through spending too much additional ‘costly’ time on collecting payment, they pass the debt for collection. This client chose us following a recommendation, a successful trial and our obvious experience in dealing with accountancy firms on a daily basis. Sterling has been providing credit control and debt collection services to accountancy firms since 2006, ranging from small firms to large multinationals. We have the skills to successfully manage their credit control, keeping the outsource invisible to their clients, and when necessary collect debts whilst maintaining existing business relationships between them and their debtor. Protecting our clients’ reputations at all times is of utmost importance. This remains the case when the business relationship between a client and a debtor has ended, with outstanding amounts then passed to us to recover them.

We would like to hear from any accountants who feel that we provide a service which will be useful to them. Get in touch.