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?
If you are facing financial difficulties and would like to discuss your options, get in touch to arrange a no-obligation conversation to find out more about the options available to you.
BABR Debt Solutions Limited, a company registered in England and Wales under number 06037874 whose registered office is at C/O Brebners, First Floor, 1 Suffolk Way, Sevenoaks, Kent, TN13 1YL.
