Don’t let debtors slip under the radar

Don’t let debtors slip under the radar

Don't let debtors slip under the radar

When it comes to debt, there has long been a feeling that the money is better in your bank earning interest, than in your debtor’s. How ironic, considering all that has been happening recently in the banking system; who knows where cash is safe these days, certainly it’s not in Iceland. But it’s still better off in your hands than with other organisations that could go bust any time, leaving you with nothing.

For the UK’s largest High Court enforcement agency, Sherforce, cash is king right now for their clients, whether they are local authorities, utility companies, solicitors, businesses or retailers.

As Chief Executive Claire Sandbrook says: “Everyone wants to get their money back as quickly as possible because the economic outlook for the year ahead is very gloomy. We are now officially in a recession and forecasters are predicting things will get worse. If your organisation is owed money for goods and services and debtors are dragging their heels, this could have serious implications for the long-term future of your own business.”

Mrs Sandbrook, who is Chairman of the High Court Enforcement Officers Association, is keen to point out: “We are here to do a job, and that is to get back what is rightfully owed. What makes us stand out above county court bailiffs is that we are prepared to take goods to auction, because that is what our customers want. We remain calm and polite with the public, even in the most difficult of situations, but we get the job done.”

Removing goods to auction
For Sherforce Officer Scott Hines, there’s not one excuse he hasn’t heard before. With a BBC’s Six O’Clock News team following him for a day, even they were surprised at the lengths people go to when it comes to avoid paying up. At a wool shop in South London, the owner denied knowing she was in debt, despite receiving lawyers’ letters, court orders and two previous visits by enforcement officers.

Scott explained: “She begged me to wait and that she would find the £4,000 she owed, but there comes a point where we cannot wait any longer and we have no choice but to remove goods. If I come back a week later, the business could have gone under or another bailiff might have visited and there would be nothing left for my client. As far as I’m concerned, there’s no option, the goods have to go.”

Under the watchful eye of the TV crew, Scott meticulously catalogued every item in the shop while two assistants loaded crate after crate of wool and fabrics into a lorry which then carted them off to Plaistow Auctions. There, owner and auctioneer Steve Zealander says he has never been busier: “We used to go to two or three bailiff clearances a week, now it’s two or three a day.”

“Auctioneers are the best barometer of what is happening in the real economy. We saw this coming two years ago and things are going to get a lot worse, especially after Christmas when businesses are going to collapse like a pack of cards.”

Don’t write off debts
When it comes to smaller debts, many organisations may be tempted to write them off. It would be a brave finance chief who confessed to their boss that they didn’t pursue all debt because the cost of recovery outweighed the amount owed.

But according to Claire Sandbrook, there is a much easier way of establishing the likelihood of whether a debtor will pay – and that is using their ‘Sherpa Front Loader’ software, a propensity model which has been specially written for Sherforce by EWA, an Essex-based agency specialising in bespoke communications.

“This is a completely unique piece of software exclusively created for Sherforce which enables us to key in all the data known about a debtor, including information about car ownership from our own Shercar system. Using a number of key criteria, including information known about ownership of property and other assets, the debtor’s address, credit reference checks and much more, we can then establish the percentage likelihood that the debtor will pay.”

“This means that heads of finance can have a clear conscious because they can then prioritise which debts are worth chasing – and stand a much greater chance of recovering more money long term. It’s particularly important for local authorities right now, because so many of them have lost millions of pounds in Iceland that they will be looking at ways of improving their debt collection rate, so they don’t have to overburden the taxpayer.”

Changing the face of the industry
Not content with just running the most successful enforcement agency in the profession, Claire is now concentrating her efforts on raising standards across the industry. “Right now, we have to demonstrate that we are all acting professionally and responsibly at a time of great difficulty for many individuals and organisations. It is never a good time for anyone to find an enforcement officer at their door.”

“If they are hard-working decent citizens who have done everything they can to stave off repossession or bankruptcy, we must do our utmost to help them where possible – and in many cases can help businesses who are struggling because they themselves are owed money so can’t pay their own bills.”

In response to requests from clients, Sherforce – which enforces High Court writs over £600 – has now established a new division called Sherforce Plus, an online post judgment recovery service for creditors wishing to recoup CCJs of less than £600, or over £600 if the CCJ is regulated by the Consumer Credit Act 1974.

As part of Shergroup, one of the leading providers of outsourced global business services – specialising in enforcement, security, legal services and IT solutions – Sherforce is continuing to push forward the frontiers, working with its administrative support team in India to raise the amount of debt recovered to record levels.

After three years of developing the business and investing heavily in new technology, Sherforce is continuing to pioneer the way in enforcement – at a time when the enforcers’ role will be increasingly under the spotlight.

For further information, please contact Shergroup on 0845 890 9200.