Invoice Finance Scenario 1
Company has entered Liquidation or Administration and you need your Capital back
In this scenario we follow a 4-stage process as detailed below, which is proven to maximise realisations in a Collect Out.
Stage 1: Debtor Collateral Review
Following an initial conversation, we always suggest that the first step is to get us out to site to carry out a comprehensive Debtor Collateral Review. We do this initial review at NO CHARGE to you, regardless of the outcome. It includes:
On-site visit usually within 24 hours but guaranteed within 48 hours to secure the following:
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Copy invoices
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System access
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Details of any issues and queries
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Backing paperwork
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Aged Debt reports
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Customer Master File
These are all required to Prepare for Collect Out
Whilst on-site, we tidy up the Ledger and immediately produce a report which indicates the true collectability of the Ledger and whether you are likely to recover your Capital.
This can only be accurately assessed once the Order to Cash process has been fully understood, which is why it takes experts to do this.
We also review Aged Creditors, Contras and other issues that may impact collectability and leave no stone unturned in reaching a realistic figure for Collections.
At this point we will also decide if any staff still on site can be of use with the Collections Process, as our main aim is to recover your position as quickly and effectively as possible so we will do whatever is required to achieve this.
THERE IS NO CHARGE FOR THIS INITIAL VISIT, REGARDLESS OF OUTCOME
Stage 2: Prior to Collect Out
We will agree a No-Win-No-Fee with you and discuss whether you would prefer to have Bad Debt Protection in place, which will aid in maximising Collections.
Our fee structure is incredibly flexible and can be:
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One No-Win-No-Fee percentage agreed on all Collections
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A Tiered Fee based on milestones agreed with you
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A Low Percentage Fee until we reach Funds Out and then increased once a surplus is achieved
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In certain circumstances, we have even agreed to work for free until a surplus is achieved and then charged a higher Fee after that.
This variety of options indicates our confidence in a successful outcome for you.
Stage 3: Start the Collect Out
During this process, which we aim to complete within 90 days where possible, we will be utilising our full expertise in maximising Recoveries.
We report to you as often as you like, but as an absolute minimum, you will receive a detailed progress report for the previous month’s collections from us on the 5th of every month (or the next working day). This ensures you are always fully aware of the Position.
We also notify you immediately if we uncover something which will have a detrimental impact on Collections. We don’t shy away from delivering Bad News, as we appreciate that you need to know as soon as possible.
Stage 4: Collect Out concluded
Be assured that we don’t close a case until the remaining Recoverable Amount is zero.
We don’t give up when the majority of the Ledger has been realised. We feel obligated to work it down to zero, however hard those last few debts may be!
Once we have concluded Collections, we will issue our Final Report and Invoice, and call you to ensure that you are happy with the outcome, before getting your agreement to close the case.
If, during the Collection process, you have reached a surplus and re-assigned the Ledger to an Insolvency Practitioner, we will act exactly the same for them, if they retain us.
Case Study
Summary
We successfully recovered 129% of the Funds Out position on behalf of a major Funder when a North Devon Toiletries company became insolvent. We previously helped them improve their financial position when they were still trading, implemented credit control procedures and recruited staff.
Facts:
On the day we were re-instructed the Invoice Funds Out position was £1.9m with a £3.1m Ledger.
Actions:
We visited the site and obtained all the books and records for the Collect Out. We started the pre-appointment credit control and managed the Invoice Funds Out position down to £1.3m and the Sales Ledger down to £2.5m.
Results:
Within 3 months of Administration, we recovered £1.85m. This resulted in the IF position being fully recovered and a healthy £550K surplus transferred across to the Main Bank debt. Together with the £600K pre-appointment collections this brought the Total Collected to £2.45m, which is 129% of the initial Funds Out Position.
The rest of the Ledger was intercompany or invoices with genuine queries against them.
The Main Bank Debt was also secured against group property, so both divisions of the Bank recovered their Capital in full and were delighted with the result.
£2.45 Million Recovered
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.
our offices
Bristol Office
Credebt Ltd
Trym Lodge
1 Henbury Road
Westbury-On-Trym
Bristol
BS9 3HQ
Manchester Office
Credebt Ltd
2nd floor
3 Hardman Square
Manchester
M3 3EB
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
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