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£30m reduction in debtors for a £300m region

Tackled the backlog of old debtors and revised the ongoing revenue management framework.

Debtors reduced by 30% and write offs and provisions reduced by more than £5m within 7 months.

Context

A strategic initiative to reduce bad debt write offs had stalled in the UK region of a global law firm.


I was asked to intervene to resolve a disagreement between the sponsoring partners and the finance team on the best way forward.


Approach

I facilitated conversations between the sponsoring partners, revenue and credit controllers to agree a way forward.


The initiative had become fixated on automatically sending letters before action for late paying clients, which was a contentious suggestion with limited support.


Instead, set against the context of a hiring freeze, I obtained approval to hire short term contractors to tackle the 90+ day aged debt.


Working with the partners and finance team, we clarified roles and responsibilities for the 0 - 60 day aged debt and refreshed the management information to make it clearer where the problem invoices were.


Impact

Within 7 months of being brought into the project:

  • Year end debtors had reduced from the prior year by £30m / 28%

  • Bad debt charges and provisions had reduced by £5.6m


The clarified roles and responsibilities also improved working relationships between the partners and finance.

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Markham Consulting is a trading name of Red Robin Associates Ltd registered in England at Suite 5, 5th Floor, City Reach, 5 Greenwich View Place, London, E14 9NN. 

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