Recruitment sector debtors
Every business has heard of cash flow, cash flow problems, late-payment and most have experience of all of them at some point. When you are a recruiter, as many of our clients are, you are supplying staff which are the life and soul of your customers business – it’s a delicate situation which requires strategic handling when they one day turn around and tell you ‘we are having cash flow issues and can’t pay your invoices for our staff’. Is getting in touch with a specialist recruitment sector debt recovery agency the solution?
When your long term customer suddenly stops paying your invoices what do you do?
A few of the thoughts which might run through your head after speaking with your customer, possibly allowing them longer payment terms, receiving promises of payment which they do not adhere to, or worse they stop taking your calls or answering your emails:
- ‘Stop supplying staff and bring their business to a halt?’
- ‘Give them further extensions on their payment terms?’
- ‘What does this late payment mean to our own cash flow?’
- ‘How long can we wait for the money, are we relying heavily on the usually reliable income from this client to pay our own bills?’
- ‘What if they still can’t pay / won’t pay / don’t ever pay and have run up bills higher than are outstanding now?’
In the recruitment sector dealing with debtors can be difficult and requires a calm and well-thought through approach.
Have a plan ready, identify when to escalate late paying customers to debt recovery and use it
One of our recent collections was for a longstanding client who provide contractors to the engineering sector, they had several invoices outstanding with a customer who was upfront with them about the fact that they were suffering cash flow problems. Our client initially allowed their customer some breathing space (as much as they could), but when the point was reached at which they had learnt from us was time to take action to protect their position, they escalated their customer to our debt recovery team. We began to negotiate immediate payment of the outstanding amounts. And they got back to their everyday running of their business.
Escalation to a third party brings a different response from a debtor
As infuriating as this may be there is a time saving lesson to learn here. Quite often our first time clients are amazed how efficiently we deal with their debtors and how we can negotiate with them and obtain payments. Our clients may have struggled for months on end just to obtain a reply to their hundred emails and phone calls to a debtor. Sterling specialises in recruitment debt recovery and have worked with recruiters for over 10 years. We have developed a whole team specialised in debt recovery in the recruitment sector, able to use their many years of experience to successfully negotiate with clients debtors in even the most difficult situations.
Just think why your customers come to you looking for solutions to help filling roles which they simply cannot do themselves; they come to you because you are specialists.
We understand the terms of business and contract law which we can explain to your debtors in such a manner that they understand their position and the consequences of not resolving the matter with us now. We avoid legal action and threatening legal action until absolutely necessary – this not only allows for the debtor to communicate with our team without taking a defensive stance, but it also allows for certain business relationships to be successfully mediated using the debt recovery service, therefore allowing our client to decide if they want to continue a business relationship with their customer.
What ‘debt recovery’ may appear to be and real results which it achieves:
What do you think of or visualise when you consider debt recovery as a service for your business?
- ‘That you hope you’ll never need it.’
- ‘That it will destroy your reputation.’
- ‘That you’ll never have a chance of doing business with that customer again (even if you wanted to)’
In reality professional business debt recovery demonstrates to your customers that whilst you are sometimes willing to be lenient, there is a line. You run a business and you run that business to provide a service for a fee. You are organised professionally, including professional collection of outstanding payments.
Using the recent collection as an example of a typical outcome for our client mentioned earlier, as soon as they had escalated their non-paying customer (the debtor) to Sterling the debt recovery specialists contacted the debtor. They went through several conversations and in the end achieved the goal and arranged and managed to completion a suitable repayment plan to ensure that the full debt was paid in less than 2 months with late payment fees.
Result: Repayment of all outstanding invoices made with additional £1,146.00 paid that more than covered our No Win No Fee commission fee, plus our client has continued a relationship with their customer for future business.
You can read more about our Recruitment Debt Recovery service here.
You can also Contact Us for a free evaluation of your debt.