A poultry company established in 1991 was looking for growth and had approached their bank to increase their overdraft facility. Would the bank be helpful?

The bank refused and instead introduced them to their Finance division to discuss an invoice finance facility. They were sold the concept that they would generate cash against their invoices immediately with the debt being collected by the factor in a professional way. They were assured that at anytime they would be able to speak to their account manager.

Within a few months of the commencement of the facility it was apparent that the factor was failing to deal with allocation of payments, so the cash availability was less than anticipated.. They were now having problems in generating enough money to pay suppliers and this meant insufficient stock to meet their orders. They were unable to speak to their account manager, despite numerous promises to return their calls.

In Oct 2006 the client refused to send any more invoices to their Factor, until the above issues were resolved but nothing was ever done. The business now faced the prospect of closure.

Aston Rothbury’s solution
We were approached by an introducer and visited the business to discuss the position and the way forward. The business had endured a torrid time with the bank factor over the last six months and they were naturally apprehensive. However, we understood the nature of the problem and arranged for our accountant to visit.

During the visit our accountant could see that the bank factor had not completed cash allocations and had even been posting to the wrong accounts. In addition, no invoices had been posted since October and the ledger was in a complete mess. However, our accountant was finally able to recreate the ledger and a plan to move the business forward and out of this mess, could now be formulated.

The client was surprised to hear that we had already allocated them a client manager, a client executive and a credit controller and was further shocked to be told that they could all be contacted directly. (This is standard procedure for us and one of the service features that sets us apart from the competition).

Within days of the account being reconciled we approached their factor to clear their indebtedness and for their current facility to be terminated immediately.