Benefits of cooperation with Sterling
One of our long term clients, a serviced office space provider, uses our service as their next step if their customers fail to make payment beyond final demand stage. Having a reliable partner to call on when a debtor refuses to pay has proven to work well as a bolt on service for their day to day business operation. Indeed the service has paid for itself, as using the late payment act and clauses in our client’s terms, Sterling are able to collect additional charges from debtors which effectively covers the cost of our commission only service. Seamless cooperation with Sterling ensures that debt collection for the client is made in the background of their day to day processes so the company can focus on business as usual being sure their invoices will certainly be paid. Our long term business-relationship with this client has had added benefits. Using regular feedback and advice from Sterling they have managed to tighten up process, procedures and terms to improve the chances of collection and reduce instances of bad debt. The client escalates debts to Sterling at a set point in the collection process, so that action is taken before it is too late to collect.
Need for delicate approach
One of the difficulties for our client when faced with a non-paying business customer who agrees to rent office space for a set term, is that they are often dealing with start-ups, with failures within the first two years being a common occurrence. Collecting payments against such rental agreements from a failing business is a challenge. Sterling have been collecting debt from such businesses for over 10 years, building up unrivalled expertise and the ability to achieve the most profitable outcome for our client in each case, as well as providing advice to the client on how to protect against non-payment. Experience in debt collection is crucial for a positive outcome.
Allowing debtors too long to pay dramatically reduces the likelihood of achieving payment at all. They may be suffering cash-flow issues as a failing business, or making selective payments to nervous creditors. Adhering to our suggestions has improved the effectiveness of our client’s credit control process overall and reduced the amount of unpaid debts. We aim to obtain the best results possible from each situation we are involved in, and given that we are engaged at the right time with this client increases the likelihood of a speedy positive result. Collection is carried out in a professional manner to retain the business with the customer where they are able to continue to meet payment obligations.
Debt collection outcome
When we received instruction to pursue this particular debtor it was apparent that both the debtor and their guarantor needed to be approached simultaneously. Sterling were able to persuade the guarantor to take responsibility of the debt, and agreed in principle to settle the outstanding amounts including additional late payment fees. We continued to negotiate with the business and their guarantor to not only manage receipt of the outstanding payment but also to take responsibility for the remaining duration of the rental agreement. This meant that in the end our client was paid quickly, and in full following the escalation to our debt collectors and had enough additional late payment collected to cover our No Win No Fee commission. Beyond that success we had introduced a solution which provided them with a replacement customer who would take on the property rental from the failing business and possibly extend it, repeating business with our client into the future.
Assigning a named collector to work regularly with this client has been key to successful collaboration and allowed