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
our offices
Bristol Office
Credebt Ltd
Trym Lodge
1 Henbury Road
Westbury-On-Trym
Bristol
BS9 3HQ
Manchester Office
Credebt Ltd
82 King Street
Manchester
M2 4WQ
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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