Sovereign insolvency insights
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Sovereign Credit Management R3 Conference Presentation Insolvency Insights
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Sovereign insolvency insights
Editor's Notes
- SLIDE ONE. INSOLVENCY INSIGHTS Good afternoon everybody, We are delighted to be hosting this evening and would like to say a big thank you to the R3 for organising and inviting Sovereign Credit Management to sponsor this event. Sovereign is a leading outsource provider specialising in sales ledger management and debt collection, working alongside such respected and well known brands as BT, Thomson Directories, Nine Telecom, Reed Elsevier and the main clearing banks. But enough about us, let’s talk about you, the skilled surgeons of the financial world.
- SLIDE TWO. THE EXPERTS A good insolvency professional is someone with the right experience, knowledge and background. A person able to enter a situation with a fresh pair of eyes and enjoy bringing complete objectivity to a critical situation. That’s to say, someone who uses his/her skill and experience to save the situation and, by, turning the negative into a positive, someone who’s able, in many cases, to prevent an early death.
- SLIDE THREE. EARLY INVOLVEMENT When a body reaches a near fatal state of illness, some form of surgery is often the only solution to saving the life. The key question is, whether the body can be saved, can damaged organs be replaced or re-built in order to give new and effective life? This applies equally to a human body or a corporate one. Our key message - involve us at an early stage.
- SLIDE FOUR. THE DIAGNOSIS Here the surgeon may recognize the need for a particular kind of specialist to lend support. In the case of a company whose life needs saving, this could mean a credit management specialist like Sovereign, asking them to assess the critical health of the company. We were asked to review the collections function of a large print business and to test the sales ledger. And here are the Symptoms: The company, our patient, was essentially sound but sales were weak and cash-flow was sluggish. There was no clear, timely or accurate MI and cash was not being collected pro actively. The lender was tired and looking to exit the business. The life support was going to be removed. The question was – could the patient be stabilised and then saved?
- SLIDE FIVE. PULSE CHECK The specialist and the surgeon together must be able to re assure the patient of the need for life saving surgery. We “pulse” checked the ledger - 90% of the ledger - over 10,000 invoices, were confidentially verified in just 5 days. By carrying out this vital check we were able to determine that the “patient” had a strong chance of survival with the correct strategy in place. Next we went into the company and carried out a two day “health check”. This covered invoicing procedures, credit/debit notes, cash allocation, banking, IT systems, invoice/statement production, T&C’s, and general collection techniques. We talked to key individuals throughout the head office and also at some of the branches. Then we produced our recommendations and supported these with a carefully designed plan. OUR PROGNOSIS - The patient could be stabilised and there was an excellent chance of survival.
- SLIDE SIX. THE OPERATION It was obvious to us that their credit control team had become jaded and their systems were tired and worn out. They needed urgent help in order to save the company. Cuts must be made in the correct places. However, there is never any cause for panic. Family, friends (employees, suppliers and investors) can all be re assured by a specialist like ourselves. We used our people and systems to ‘re-energise’ the credit control function. A skilled team of collectors soon re-established agreed credit terms and by ‘turbo-charging’ the collections activity we immediately got the cash – the life blood of the business flowing. The patient was stabilized. By attending to the patient, checking vital signs and constantly monitoring progress of the recovery we were able to ensure that the business was heading in the right direction.
- SLIDE SEVEN. THE RECOVERY Within 12 weeks 45% of the ledger was paying before the due date and the turnaround for customers receiving a response to a query had been halved within that same period of time. The Result – the birth- or, in our case, the re-birth of a new, alive and fully functioning company! Sovereign’s remit was to stabilise the patient so that a full and lasting recovery could be made. The project was planned to last 3 months, however the Board were so impressed we are still running the ledger a year down the line.
- SLIDE EIGHT. THE OPERATING THEATRE So as you can see we are united by working on the most critical cases, where early involvement is a business imperative. And that means total trust in managing problematic credit and collections issues. Call us before it’s too late! Thank you.
- Sovereign Credit Management Ltd 3 The Courtyard, London Road, Horsham, West Sussex RH12 1AT Tel: +44 (0)1403 755755* | Fax: +44 (0)1403 755756 http://www.sovcredit.co.uk/