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Case Study

Case Overview

A print firm established in 1990, located in East Anglia, was wound up on August 2nd, 2023. The company reported outstanding invoices totalling £361,725. BABR Debt Solutions Ltd was appointed by the liquidator on September 4th, 2023, to collect these debts.

Action Taken

  • Swift Mobilisation: Within 24 hours, a BABR representative secured all relevant documentation, including delivery notes, bank statements, open invoices, and a backup of the company’s accounting software.

  • Data Verification and Analysis: The accounting software backup allowed for verification of details and creation of a collection schedule with:

    • Account numbers
    • Individual invoices
    • Customer contact information

Challenges Addressed

  • Multiple Accounts and Invoices: The collection effort encompassed 58 accounts with numerous outstanding invoices.
  • Onboarding Efficiency: A streamlined onboarding process was crucial due to the limited time frame.
  • Limited Staff at Debtor Company: The liquidation process left few staff at the print firm, requiring independent data retrieval.
  • Customer Engagement: Establishing trust and securing cooperation from debtors was essential.
  • Proof of Delivery: Verification of delivered goods and services addressed potential disputes.
  • Debt Age: Collecting aged debt often requires additional effort.
  • Unaccounted payments:  Verifying customers advice that payments totalling £191,000 had been made prior to our instruction, none of which had been deducted from the ledger value.

The Approach

  • On-Site Data Collection: The head of debt recovery visited the liquidated company to obtain crucial documents and liaise with the remaining staff.
  • Data Digitisation: All documents were scanned and converted to PDFs for easy access and sharing.
  • Collection Schedule Creation: Using the accounting software backup, a comprehensive collection schedule with detailed customer information was created.
  • Initial Contact: All debtors with outstanding balances were contacted via email within 24 hours, requesting payment within seven days and immediate communication if there were disputes or payment obstacles.
  • Dispute Resolution: Companies requesting proof of delivery or invoices were promptly addressed.

The Outcome

  • Recovery Rate: BABR successfully collected £163,000 out of the initial £173,689 in outstanding invoices, representing a recovery rate of approximately 94%.

  • Uncollectible Debts: The remaining £10,689 comprised:
    • Disputed invoices totaling £8,000 (ranging from contra fund requests to settlement agreements)
    • Companies that were themselves liquidated
    • Three small accounts where collection efforts are ongoing
  • Unexpected Collections: Additionally, further payments were received from companies with credit accounts, without corresponding invoices.
  • Total Collection: Through our efforts, BABR Debt Solutions Ltd was able to collect a total of £201,133 within four months. This significantly increases the insolvency practitioner’s ability to distribute funds to unsecured creditors.

Lessons Learned

  • Speed is Crucial: Prompt action in securing information and documentation facilitates a smoother and faster debt recovery process.
  • Direct Access Matters: Having a designated contact person within the liquidated company can significantly improve collection rates.
  • Dedicated Staff: Assigning a dedicated staff member to manage the file ensures a consistent and efficient collection process.

Need some advice?​

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