Case Study 16 - Turnaround
Overdue debt reduced from £3.3 million (45% of the ledger) to £521k (less than 10% of the ledger) within 12 weeks of instruction and Invoice Finance switchover completed.
summary
A London based £100 million turnover Healthcare Recruitment Company with a £7.5 million ledger and nearly 1000 debtors needed to change Invoice Finance provider from a Platform Funder to a more traditional Invoice Finance Facility due to cashflow constraints from the existing Funder.
Facts
Credebt were asked by the potential new Funder to improve the ledger profile and support Credit Sanctioning of the deal.
Their 120-day-plus column was over £1.5 million, the total overdue debt was over £3.3 million and the DSO had drifted up to over 105 days.
Following our initial visit and review the business engaged us to turnaround the ledger profile and get them ready for their new Funder.
The business was under-staffed regarding Credit and Collections and needed short-term Collections assistance whilst recruitment took place to make us redundant asap.
The business had more than 7,000 outstanding invoices and many queries that needed addressing, some going back several years.
actions
Credebt took over the collections for 750 plus debtors and left the top debtors with the on-site team as they had a competent in-house Credit Manager who just needed more staff and would be able to cope in the future.
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 and weekly collection targets.
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 from 105 to 68 days.
The 120-day-plus debt was reduced from £1.5m to £300k (including 2 legal cases on payment plans) and the overdue debt from £3.3m to £521k.
Responsibility for all collections and further progress was handed over fully to the in-house team that had been assembled.
An invoice finance facility switch-over went smoothly to allow for growth of the business.
Happy Client, Owner and Funder, a win-win-win situation.
Credebt have been retained to help with a few debt collection cases for the old debt.
An amazing, rapid growth business that had unfortunately chosen the wrong funding partner in the past now had the right one and would go from strength to strength in the future.
Overdue debt recovered
million recovered in 12 weeks
Testimonials
In this true win-win-win situation we had a happy client, owner and funder. See what they had to say about our involvement:
I have been really impressed with the work from the team at Credebt. They prepared a concise 3-month plan for us to tackle our aging debtor balance and our teams worked together seamlessly.
They are focused on setting my company up for long-term success by ensuring we have the right policy, processes and key stakeholders’ buy-in.
Even after our 3-month project, the team is always happy to be our sounding board and I would highly recommend Credebt.
We instructed Credebt to conduct extensive credit control assistance on an Invoice Discounting Facility prior to “go-live” where recoursed debt, due to the volume of invoicing, had become a significant portion of the ledger.
They quickly engaged with the client on site, got to the crux of the credit control issues and implemented change, resulting in rapid collection of their aged debts.
This enhanced the risk profile of the transaction by improving collections permanently through the implementation of credit policy and collection procedures, reduced total overdues, and upskilled their team. Credebt’s engagement was subsequently extended by the client which demonstrates their ability to add significant value to both clients and lenders.
Credebt did a fantastic job for a recent client whereby the team helped our prospect with their credit control procedures and improved their debtors’ aged profile significantly.
This helped to release a higher level of funding for the Prospect and provided long-term value for the company as they implemented the enhanced credit control procedures.
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
“Credebt did a fantastic job for a recent client whereby the team helped our prospect with their credit control procedures and improved their debtors’ aged profile significantly.
This helped to release a higher level of funding for the Prospect and provided long-term value for the company as they implemented the enhanced credit control procedures.”
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.
our offices
Bristol Office
Credebt Ltd
Trym Lodge
1 Henbury Road
Westbury-On-Trym
Bristol
BS9 3HQ
Manchester Office
Credebt Ltd
125 Deansgate
Manchester
M3 2BY
London Office
Credebt Ltd
Hamilton House
Mabledon Place
London
WC1H 9BD
Credebt Limited: Registered in England Number: 6933734 Registered Office: Trym Lodge, 1 Henbury Road, Westbury on Trym, Bristol BS9 3HQ
Data Protection License Number: Z1837677 | Credit Services Association Membership number: 804
