CREDEBT LTD : Case Studies

CREDEBT LTD : The debtor book professionals

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Case studies


Case study 1: Outsourced Credit Control, Policy Implementation and Recruitment assistance for business in Turnaround.

Summary of facts
Referred into the business by leading Insolvency Firm with approval of the invoice Finance provider.

Visited Business to understand challenges faced and devised strategy for improvement.

We were then instructed directly by the business to take over their Credit Control until we got things under control. We set up a dedicated phone line and used Company Headed paper and email addresses to act confidentially to collect in the debt.

Ledger on day one was £3.5 million with over £1 million over 90 days old. We collected in £1 million plus per month for 3 months and continued to be retained by the business whilst we wrote a Credit Policy and procedures manual specifically suited to the business.

During this time we also reviewed the Order to Cash process and resolved all queries to ensure that all bottlenecks within their cash flow were eliminated.

We also assisted with the recruitment of a staff member to deal with the collections on an ongoing basis. We reported daily to the Invoice Finance Company and Insolvency Firm that instructed us to ensure they were fully aware of all issues as well as progress being made.

We then exited the business after nearly 5 months after ensuring the new staff member was implementing the policy.

 

Case study 2 : Debtor Book Realisation

Summary of facts
Working directly for Insolvency Practitioner for a £800k Construction business.

Visited Business the day after it ceased trading but prior to the meeting of Creditors and spent the afternoon with the Directors discussing the Ledger which at that stage stood at £800k.

Director wanted to put £220k in Statement of affairs so we needed to understand why such a big difference.
Aged Debt report had over £200k on it which needed to be written off promptly to ensure the report reflected the amounts showing in the Management accounts.

Arranged a course of action with the directors to take them up to the day after the Meeting of Creditors as well as requested all the information that would be required for take on.

Following Meeting of Creditors

Went back to business for full day after meeting of Creditors had taken place and lifted all files, back up, contact information and contracts that were available to help with the collection process.

Aged debt at this stage now under £600k million with several items still remaining which are not justifiable and several contractual disputes to deal with.

Have kept in contact with Directors to eliminate some queries and work through the ledger and that has helped us to achieve realisations to date of £282k with a further £27k expected.

Regular reports on progress and collections produced to the Insolvency Practitioner to enable them to keep the Creditors fully informed of all progress and also reporting the more negative news promptly. This level of collections would not have been possible without the Sales ledger Audit and take on at the front end.
Charge for this service 6% no win no fee.

 

Case Study 3 : Turnaround

Summary of facts
Working directly for a distribution company following an introduction by the Invoice Finance Company.

Charge for this service was based on a daily rate and partial charge for collection but the total project cost less than £45k

 

Case Study 4 : Debtor Book Realisation

Summary of facts
Working directly for an Insolvency Practitioner only.

Charge for this was 8% no win no fee. (Higher charge due to back end nature of the collection i.e: Handed to us some time after instruction.)

 

Case Study 5 : Debtor Book Realisation

Summary of facts
Working for Invoice Finance Company only.

Also:
2 Potential distressed Clients found whilst chasing and referred back to an Insolvency firm that, 1 of these came to nothing and one may become a CVA Client at last update.

Charge for the Collection of £989k was 5% no win no fee.

 

Case Study 6 : Debtor Book Realisation

Summary of facts
Working for both Invoice Finance Company and Insolvency Practitioner.

Credebt Received a phone call from Insolvency Firm to request attendance to potential client site to audit Sales ledger and report back with probability of collections as the Debtor book was the only realistic Asset.

We analysed the ledger and agreed to work jointly for the Invoice finance company and the IP. We further agreed that we would only charge a fee once they had both received theirs!

Ledger stood at £302k with £244k owed to the Invoice Finance company for Advance and Termination fees.
The insolvency firm were looking to achieve £20k in fees due to the complex nature of the insolvency.

Therefore we confidently committed that unless £264k was collected to satisfy both of these charges that we would not charge a fee, and then when we did it would be from the surplus.

We collected in £282k within 94 days of meeting of Creditors

Charge for this was 6% no win no fee of the full collected amount but only once we had reached £264k

But for the IP and ABL we effectively worked for free!

 

Case Study 7 : Debtor Book Realisation

Summary of facts

Also:
1 Potential distressed Client found on day 23 of chasing and referred back to the Insolvency firm that Instructed us.

1 Potential Invoice Financing Client found on day 25 and passed to ABL to finance. Passed to the ABL chosen by the IP to enhance their relationship.

There were very few other assets in the business and the Debtor book initially had been considered difficult to collect so the IP was delighted with this result.

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