Client: An office supplies company with a global presence
Mandate: To collect receivables from long-term business partners
Situation: The client was having collection issues with its customers. Being a member of a close-knit industry, the client was reluctant to take strong legal action against its customers. As a result, the client’s working capital cycle was negative, and it had to borrow funds from banks at an over 15 percent rate of interest.
Resolution: Our lawyers reviewed the sales paperwork and contacted each of the customers of our client over a two-week period, citing a standard collection process. In several cases, we discovered that the customers were facing liquidity issues. We advised the client to offer a repayment schedule to such customers, to facilitate the payment over a 3-4 month period. Our systematic involvement was helpful in assisting the client recover over 95 percent of its overdue amounts.
Note: Some details may have been edited to respect client confidentiality.
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