Case study
Debt Collection Solutions
SMEs need to chase their small outstanding accounts
Mike Hall is the Managing Director of a small company specialised in pest control. The average outstanding account is £90 with invoice values ranging between £75 and £125. He always quotes a fixed price and never increases it even if he spends more time than anticipated on site. This way there is never any dispute about the fee. He hands over an invoice to the customer, which can be a business or a consumer, when the job is done and he expects to be paid immediately but many often seem to have a good reason not to pay him there and then. Mike works 10 to 12 hours a day and he does not have the time to chase his outstanding invoices.
Mike was looking for a cost-effective solution to recover small value accounts without having to spend time uploading every single one of his overdue invoices onto a platform.
Our Solution
Thankfully, Mike is well organised and although most of his jobs are a one-off, he keeps all his customer and invoice data on a simple Excel table. Our IT systems are able to import any database onto our debt recovery platform. All Mike had to do was to email us his Excel database which clearly showed which invoices were still outstanding and we did the rest.
After 3 ½ years of trading Mike’s situation was desperate and his bank overdraft was forever increasing. Although he had achieved a turnover of £728,000 in that time, he had £140,000 worth of unpaid invoices, which were between 60 days and 3 years overdue! 4 months after he started using CLI, he was back in the black at the bank and he decided to book his first holiday since starting in business, and to buy a new van.
“I thought that the cost of using a debt collection agency was going to be high, especially for chasing small invoices and I had been looking on the internet for some sort of innovative solution but everything I came across seemed to involve investing quite a lot of my time. With CLI, I have nothing to do. I don’t have to buy stamps, send letters, and I don’t even have to post the cash against each invoice: CLI send me an updated spreadsheet on a monthly basis.”
Beyond the simplicity of the solution he found at CLI, Mike also like the fact that CLI only charged a commission on successful recovery: “The commission rate is more than reasonable, especially given the low value of my outstanding invoices.”
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