Debt recovery

Case Study #025: $25,000 Bad Debt
A small IT consultancy, known for its innovative solutions, faced a severe cash flow crisis after successfully delivering a high-value project. The consultancy had completed an SGD $25,000 software solution for a mid-sized company, fulfilling all contractual obligations. The project was delivered on time, within budget, and met all agreed-upon specifications. However, when it came time for payment, the consultancy’s invoices went unanswered.

Over six months, the consultancy made multiple attempts to follow up on the overdue invoice. Each time, the debtor company responded with vague excuses, citing “internal administrative delays.” Despite promises to resolve the issue, the debtor failed to provide a clear timeline for payment. This lack of responsiveness and accountability left the consultancy in a precarious financial position. As the months dragged on, the company’s cash reserves dwindled, pushing it closer to financial instability.

Desperate and unsure of what to do, the consultancy reached out to JMS Rogers, Singapore’s leading debt recovery agency, for a solution.

When JMS Rogers took on the case, we knew the stakes were high. The consultancy’s survival hinged on recovering this payment, but equally important was preserving the professional relationship with the debtor, a key player in their industry. Here’s how we approached this challenging scenario:

Professional Engagement
JMS Rogers initiated contact with the debtor’s finance department immediately. Unlike aggressive tactics that could damage reputations, our approach prioritized professionalism. We introduced ourselves as mediators who understood both sides of the story, ensuring the debtor didn’t feel attacked while firmly emphasizing the seriousness of the situation.
Thorough Investigation
Through careful inquiry, we uncovered that the debtor’s delays were not merely administrative. Their internal financial struggles had caused them to redirect funds intended for the consultancy. Understanding this, our team formulated a strategy to address the debtor’s financial constraints while securing payment for our client.
Strategic Negotiation
Our negotiation began with emphasizing the binding nature of the contract and the potential legal ramifications of non-payment. We balanced firmness, presenting ourselves as partners working toward a fair resolution. After persistent communication, the debtor agreed to clear 50% of the invoice upfront and committed to settling the remaining balance within three months.
Through relentless follow-ups and clear communication, JMS Rogers ensured that the debtor honored their agreement. The consultancy received full payment within the agreed timeline, stabilizing their finances and allowing them to focus on growth. Importantly, the relationship between the consultancy and the debtor remained intact, paving the way for potential future collaborations.

Read more : https://www.jmsrogers.com/