Springfords LLP blog

Some news, views and comments about everything and anything, relevant and irreverent.

Debt Mismanagement

09 July 2014

When the company that handles the collection of outstanding invoices hits the skids, questions should be asked. “show me the money” comes to mind.

So what went wrong at Debt Help & Advice Limited?  After falling down on the ‘help’ and ‘advice’ bit, they proved that ‘limited’ was unequivocally accurate.  For a business built on recovering the hard to collect debts that have exasperated others, it should be tenacious enough to make sure its own books balance ... or so you would think!

Debt recovery, invoice management, sales handling.  Call it what you like, it amounts to the same thing - paying someone else to make sure someone else pays you.  It’s most often the recourse of businesses that need to get recalcitrant customers to settle their accounts and, if the cost of employing a third party is less than the cost of pursuing the matter yourself - well, the benefits are obvious.

In Charles Dickens’ day, the invoices themselves were sold on to crooked-teethed thugs who eased your cashflow, but did little for your repeat business prospects.  Today, dental science has improved beyond all imagination.  However, according to recent press reports, in this case, the debt recovery appears to have stopped at the door of the erstwhile management company, and the cash never made it back to the customer.

Whilst we all know that there’s always an element of risk in business, formally recognising and managing that risk should be part of your overall business planning.  There’s the risk that your customers will fail to settle their debts for a start, and if you don’t take account of that, it could be you that suffers the consequences.  Not getting paid for work done is as sure a road to disaster as speeding up a slip road into the face of a ‘bridge out’ sign and a construction worker, frantically waving a pair of red flags.  As inevitably as that scenario turns out, businesses in that situation are heading for liquidity disaster.

There are better ways to deal with client debt issues - prevention of course being better than cure.  Springfords don’t do debt recovery, or liquidation for that matter, but we do have plenty of experience that’ll make sure your “great expectations” don’t fall on hard times.  Sadly, for the customers of Debt Help & Advice Limited, apparently out of pocket to the tune of several million pounds, the “battle of life has turned into “the thousand and one humbugs”.

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