In the competitive landscape of electrical wholesalers, maintaining a healthy cash flow is paramount. Late payments and overdue accounts can severely impact operations, hindering growth and stability.
This case study explores how Federal Management assisted and continues to assist an electrical wholesaler in England. For the benefits of this case study, it focuses on the initial period. We helped the Electrical wholesalers by recovering 64 overdue accounts, thereby restoring financial equilibrium.
The Client
The client, a reputable electrical wholesaler based in middle England, has been supplying electrical components to various businesses, including contractors, retailers and local authorities.
Despite a robust clientele, the company faced challenges with accumulating overdue accounts, which began to seriously hurt the profitability of the company.
The Challenge
Over time, 64 accounts became overdue, with debts ranging from £1,800 to £54,000, totalling £320,000. The internal credit control team had exhausted their efforts, and the mounting debts threatened the company’s liquidity.
The wholesaler was extremely mindful of their brand so therefore needed a professional debt recovery solution that was professional, effective and compliant.
The Solution
1. Initial Assessment and Strategy Development
Federal Management conducted a comprehensive analysis of the 64 overdue accounts. This assessment identified patterns in late payments and categorised debtors based on factors such as debt age, amount, and debtor responsiveness. A tailored recovery strategy was then formulated to address the unique challenges of each account.
2. Pre-Action Due Diligence
Before initiating contact, due diligence was performed to verify the legitimacy of each debt and assess the debtor’s financial situation. This included ensuring they were still actively trading as well and verifying the locations provided.
3. Communication and Negotiation
Federal Management’s team engaged with debtors through a series of letters, emails, and telephone calls. Their approach was direct and respectful, aiming to maintain the client’s business relationships where possible.
By understanding each debtor’s circumstances, where payment in full was not possible, we negotiated repayment plans that were realistic and agreeable.
4. Escalation and Legal Action
In cases where debtors were unresponsive or unwilling to cooperate, Federal Management escalated the matter.
This involved issuing formal demands and, if necessary, initiating legal proceedings. Their in-depth knowledge of the legal framework ensured that all actions were compliant and strategically sound.
5. Recovery and Monitoring
Once agreements were in place, Federal Management monitored repayments to ensure adherence to the agreed terms.
They provided the client with regular updates through their 24/7 online access portal, offering transparency throughout the process.
The Results
Within 5 months, Federal Management successfully recovered £286,000 of the £320,000 owed, achieving just under a 90% recovery rate on undisputed debts.
This outcome not only alleviated the immediate financial pressure on the electrical wholesaler but also reinstated a positive cash flow, enabling the company to focus on its growth and expansion plans.
Client Testimonial
“Federal Management’s professionalism and effectiveness were evident from the outset. Their tailored approach to our unique situation resulted in a recovery rate beyond our expectations.”
Conclusion
This case underscores the importance of engaging a professional debt collection agency like Federal Management when internal efforts prove insufficient.
The strategic approach, regulatory compliance, and commitment to ethical practices make Federal Management an invaluable partner for businesses facing debt recovery challenges.
Contact Us
If your business is facing similar challenges with unpaid invoices, contact Federal Management on 0333 043 4420 or fill our form to find out how we can assist you in recovering your debts efficiently and professionally.
