Category: Case Study | Date: 20/03/2019

Logistics - Credit under control

Turnover | £25.5M

How a company’s accounts are managed could mean the difference between business success and failure. Considering that 40% of the value of a typical company’s balance sheet is based on the sales ledger, extending credit to an unstable customer or trading on unfavourable terms could result in defaulted payments which choke cash flow. But what do well managed accounts look like? One company that has got their credit firmly under control, is a specialist business relocation firm based in London.

“Being in the service industry, there’s very little protection for us,” explains Tim, Finance Director. “Unlike a telecoms company, for example, which could cut a phone line if a client didn’t pay, we can’t take our `service back. We’ve got no leverage, so essentially no protection from non-payment.”

To combat this problem, the company has created a strong credit control system which is backed up by credit insurance and credit monitoring from Xenia. “Xenia have really helped us to be more active with our Credit Insurance. Now we use it as an upfront credit control tool and also monitor potential and existing clients,” Tim said.

“Not only does this help us make better decisions about extending credit, it also means we’re alerted practically immediately if there are any problems - if a new customer is not approved, this sets off alarm bells for us and we can investigate whether there are any suitable solutions” he continued.

Recently, Xenia also managed to extend this company’s own credit limit. “The service has been excellent,” said Tim. “They’ve showed us how our credit rating looked to the outside world, and also what we could do to improve it. Xenia is also looking at how our reports are presented and are monitoring our own credit status, so if something changes we can implement improvements straight away”.

Before working with Xenia, the company’s Credit Insurance direct from the insurer. But for Tim, the objectivity and expertise which Xenia offer makes all the difference: “The main benefit of using Xenia is on the admin side. We’re not a credit insurance business – we’re using their expertise to ensure that we get the best deal and the right deal. We’re also quite a lean team so it makes sense to use someone who knows exactly what they’re doing”.