
£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.