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Collecting A £1 Million Invoice: A Fable



During a recent round of interviews, Director Joe Postings heard himself telling somebody that he is used to working with billion-dollar businesses when elaborating on his business’ marketing strategy, and it is true. Throughout his career he has spent many years working directly for several companies who were generating revenues in excess of $1 billion dollars a year (all American owned hence the reference to US Dollars).


The industries involved have varied arguably just as greatly as the size of the companies his experience has led him to work with, spanning from industrial services and construction to car parts, to corporate law, healthcare, and hospitality. Therefore, the opportunities to collect on all kinds of different size debts under different payment terms and arrangements and for vastly different products and services have presented themselves to him over the years.


It certainly has not always been that way though, in his first role which involved a cash-collection element, at the tender age of 19, he was also responsible for emptying the bins, collecting lunches for the partners, and taking the post to the post office every day after it had been franked. He would never have guessed at that stage in his career would have ended up where it is now, or that it would not have been anywhere near the lineal progression in the corporate world he aspired for it to be.


Just 3 years into his credit management career he found himself working for one of those billion-dollar companies. A global conglomerate with a UK based subsidiary. He admits that having gone from a small family-run financial advisor to a multi-national corporation he never had any comprehension of its size from within the four walls of the relatively modest office space where he was asked to work.


However, one thing that was clear, was that the numbers on the size of the ledger seemed to be bigger, by quite a lot. As was the structure of the credit control department that he was placed in to become one of the large team’s credit controllers for the company. There was a big white board at the front of the department office with all sorts of numbers which made absolutely no sense to him and a few percentages which did offer a bit more context.


What became apparent over the months and years that he spent working there was that the numbers on the white board represented cash-collection figures split out into different inter-company divisions and regions and these were being monitored by the team’s credit manager and worse still, the Managing Director who happened to walk through the office on his way to his own office every day and have a glance at them.


It spelled pressure for Joe, just 3 years into his career but surrounded by a very supportive team of more senior collectors, whom the majority of had spent many years in their roles working for the company, it was a pressure which felt shared amongst them. Although it was not a conscious thought at that time, he realised at that moment the importance of having a strong teamwork ethic and a good leader in a team of collectors.


What was less obvious to him, than the numbers on the board with the total written in big red ink, was that our efforts were being measured against cash-collection targets. It is as normal as rainy day in England to him now but at the time it was something of a mystery. Having personal cash-collection targets on the branches he was solely responsible for collecting on, then there being regional targets, and divisional targets and then one big company wide-target.


Being a bit of a “thinker”, he quickly devised a plan, to target the largest debts first, aiming to recovery the largest volume of cash in the quickest amount of time. “Why call chasing payment for a £500 invoice when I can call, and potentially collect payment for a £15,000 invoice?” he thought. So, he sieved his way through his paper-based ledgers at the beginning of the month, looking at the totals first to identity the ledgers with the biggest overall balances, and then he saw it, there it was.


A single line entry under a particular customers names with an invoice number and a date next to it and the value, “£1,000,000.00”. Knowing what his personal cash collection target was and what a significant proportion of that target this invoice represented everything else seemed to immediately pale into insignificance. He even imagined being highlighted as the member of the team who had collected the most that month amongst his colleagues and it was exciting.


But what to do? It is not everyday you come across a £1 million invoice to be collected, at least not in our experience. So, Joe decided to seek the advice of his credit manager to see if she could offer him some advice on how to approach it, who to talk to at the client side, whether or not it might be better to use one of the account managers within the company to lean on their relationships with the client to try and make the process as smooth as possible.


Anticipating something big and complex Joe was prepared to make notes, follow a strict set of instructions, and navigate several steps in order to achieve this monumental task of collecting such a large sum of money he approached the credit manager and alerted her to the entry on his ledger. She simply replied by saying that it was all in hand and she is going to be calling to collect the payment off them this afternoon. Yes, quite the anti-climax.


Naively, Joe had assumed such a large sum of money would have been treated just the same as the regular invoice but what he did not realise was that a lot of groundwork had already been done before he even had the opportunity to print his ledgers off for the month by the sales people, the contract managers and the finance director so by the time Joe reached his credit managers desk, there was actually nothing to do but wait for it to be allocated off his ledger.


So why write a blog about it? Well, for several reasons really. Here at JSP Credit Management we pride ourselves on being an organisation that cater to any businesses needs regardless of their size because we have the experience to do that. We are not over-awed by big numbers and also to say that we have come to realise that big numbers do not necessarily mean more work (at least not when it comes to collecting payment for the corresponding invoices).


We have therefore devised a commission structure to our debt collection service which respects that fact and aligns to our values of a company which is to provide the best value for money to our clients without compromising on the standard of service and to be fair and transparent in approach which is why we offer those rates upfront to our client on our website. They can be replicated but our skills and experience cannot and that is why were so proud to be the company we are.


We are here to do a bit to help businesses safeguard their cash flow against late payers or debtors that are refusing to pay, so if you have been struggling to get an invoice paid and would appreciate the support of a team who pride themselves on operating in a way that is mindful of the above then visit our website at www.jspcreditmanagement.co.uk and contact us to discuss your needs. We operate on a no-win-no-fee basis for bad debt recovery and our credit control and credit risk services can be ordered via our website with the littlest of hassle.


P.S We also got to find out what a “fable” was which was fun!

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