Case Study 15 - Turnaround
Overdue debt reduced from £2.1m (51% of the ledger) to £17K (less than 1% of the ledger) within 12 weeks of instruction, and Invoice Finance facility secured
summary
A successful outcome was achieved for a Manchester-based £18m turnover Plumbing Supplies Company with a £4m ledger and in desperate need of an Invoice Finance Facility due to cashflow issues.
Facts
Credebt were asked by the potential Funder to help the business achieve funding as they had failed 2 new business surveys 6 months apart.
The 90-day-plus column was over £1.2 million, the total overdue debt was over £2 million, and the DSO had drifted up to over 100 days.
Following our initial visit and review the business engaged us to turnaround the ledger profile and get them funding ready.
The business was under-staffed regarding Credit and Collections and the resource they did have was not managed effectively, leaving them demotivated and not achieving the results required.
The business had more than 15,000 outstanding invoices and many queries that needed addressing, some going back several years.
actions
Credebt took over the collections for 350 debtors and left the top 20 with the on-site team, but took over management of the team to achieve the results required.
In addition, we wrote a Credit Policy and procedures for the business that would prevent the re-occurrence of any issues.
We visited the site weekly to ensure progress was being made and tasked the on-site team with an extensive query resolution project.
We also helped identify key positions that the business required, including salary levels and experience and assisted with the recruitment process.
Results
Within 3 months, the DSO was reduced to 64 days.
The 90-day-plus debt was reduced to £10k and the overdue debt to £17k.
Responsibility for all collections and further progress was handed over fully to the in-house team that had been assembled.
An Invoice Finance Facility was secured to allow for growth of the business.
Happy Client, Owner, Investors and Funder, a true win-win-win situation.
Overdue debt recovered
%
recovered in 12 weeks
How can we help?
Credebt provide a full range of expert Receivables Management Solutions to the Insolvency Profession, the Invoice Finance Industry, Turnaround Practitioners, advisers and their clients, from full sales ledger recovery to outsourced credit control.
For more information about how we can help call 08456-6385256
or email our MD, Glen Morgan at glen@credebt.co.uk
“I have instructed Credebt on several occasions and have always been happy with the results. Credebt are out on site quickly and provide feedback as soon as they are on site. Very useful for both in-life cases and new business opportunities.
I would have no hesitation in recommending the Credebt Team for Risk Management and Receivables Management work.”
Get In Touch
We work for Invoice Finance companies, Insolvency Practitioners and Turnaround Specialists throughout the country. If you would like us to contact you to discuss our services please send us your details.
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