Discreet verification leads to positive results
When a company approached a funder requesting an increase of an existing £4m confidential invoice finance facility, we were asked by the lender to conduct sales ledger verification, together with a review of the credit insurance debtor limits versus actual debtor balances.
Cerberus Receivables Management (CRM) initially visited the company with a three-man team and spent 2.5 days on site. After consultation with the client, it was decided that we approach the customers in an undisclosed manner.
We soon identified a number of risks such as outstanding credit notes, part order dispatches, poor returns process, plus poor internal controls and administration. In addition, the company was not adhering to credit insurance guidelines.
We concluded that rather than an immediate increase in funding; the company should be able to increase cash resources by improving its systems and reviewing its guidelines and procedures.
CRM was asked to oversee these changes by both parties on a weekly basis over an extended term.
Through our recommendations and advice we were able to achieve the following positive outcomes:
- Ongoing debt verification giving comfort to the funder
- Amendment of customer T&Cs to help speed up query/dispute resolution
- Instigated face-to-face meetings with disputed accounts to quickly resolve outstanding matters
- Having a dedicated resource to the returns process, preventing delayed debtor payments
- Applying focus and assistance to ageing debt, helping reduce disapprovals and increasing availability of funds
- Demanding remittance advices, allowing for correct allocation of funds
- Improved company housekeeping from order to repayment – reducing queries, disapprovals, and ensuring credit insurance guidelines were adhered to.
The effect of these changes was an increased funding line, improved cash flow and a funder and business that were extremely happy with the results.
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"The Cerberus Group have provided outstanding insolvency support to the team at Beesley for many years now.
Their service is speedy, cost effective and they work in partnership with us to deliver the optimum outcome.
They are approachable, practical and we enjoy working with them".
Mark Beesley
Managing Director
Beesley and Company