Construction Industry
Credit Management Construction Industry Case Studies
Please find below our Credit Management Case Studies for the Construction industry which provide feedback and success stories from past clients.
Outsourced collections
Technical Testing and Analysis Company
Market: Construction & Retail| Turnover: £10.8m | 340 Live Accounts
Issue
- Debtors regularly paying beyond agreed terms
- No escalation process enabled their customers to delay payment without any
implications - 90 day + debt very high
Solution
- Develop, gain buy in from the business and implement a new customer onboarding
process with the aim of identifying contract requirements to reduce
disputes and identify unacceptable terms - Training sales & project team on commercial aspects of customer terms and contract law.
- Worked with client to produce reports that highlighted disputed debt by reason code, value, volume and days taken to resolve to assist understanding process and system changes needed in the order to cash process, identify any training needs and set KPI’s.
- Weekly conference calls to discuss high profile accounts and any disputed debt that require input from multiple teams and how to coordinate this
Result
- Debtor days reduced from 100 to a constant average of 54
- Reduced disputed invoices and improved timescales for resolution, therefore improving customer satisfaction and cash flow
- Increased cashflow means ability to grow substantially by acquisition
Control systems contractor
Market: (Construction) | Turnover: £500k
Issue
- Spent too much time chasing outstanding payment which impacted on ability to carry out normal day to day work
- Did not want to involve 3rd party such as factoring company who were only interested in collecting payment, not maintaining positive customer relationships
Solution
- Provided outsourced credit control service that was customer focused
- CMG UK acted as an undisclosed third party that helped to maintain customer relationships
Result
- Significant improvement in cash flow
- Reduced their overdraft facility by £30,000
- More time to carry out day to day work, after delegating cash collection to CMG UK
Consultancy and process improvement
Building Services Consultants
Market: Construction | Turnover: £600k
Issue
- High debtor days
Solution
- Carried out a diagnostic review covering ‘Order to Cash’ process, identifying under-performing areas.
- Designed & implemented an in-depth credit policy.
- Coached existing staff to carry out credit control functions
Result
- Skilled and motivated credit control staff
- Reduction in debtor days from 92 to 45
Debt recovery
Mechanical and Electrical Contractor
Market: Construction | Turnover: £26m
Issue
- Client had problems getting outstanding retentions paid from main contractors
Solution
- Used experience in the construction industry to effectively negotiate payments with their clients’ quantity surveyors
Result
- Collected £36k in unpaid retentions for our client
Roofing Contractor
Market: Sub-Contract and Construction
Issue
- Client was owed £115,960 and had not been successful in collection the balance themselves
- Wanted quick resolution of the issue
Solution
- CMG UK were brought in to add greater impact to the matter
- A letter before action was sent to the debtor showing all documents that would be relied on if the legal proceedings where issued showing our client was entitled to payment in full
Result
- After much negotiation using contractual information as leverage, our Client decide to compromise and accepted payment of the principle debt only, to ensure quick resolution
- Our client received 100% of the principal debt
Credit Management Construction Industry Testimomials
Training
“When CMG UK delivered training, we immediately improved processes around onboarding clients, confirming who the principal is terms and credit checks within days of the sessions. Having a better understanding of how the Construction Act impacts and helps us was key. I couldn’t recommend the training enough to any new or existing companies working within the construction industry.”
Alex Whitehand Financial Controller, Heyne Tillett Steel. Structural, Civil and Geotechnical Engineers
“We have partnered with CMG to manage our credit control for several years, achieving excellent results. Through analysing disputes, we identified gaps in our onboarding process, particularly the need to strengthen our project managers’ commercial awareness, understanding of contractual obligations, and knowledge of the Construction Act.
CMG designed and delivered targeted training that equipped our team to better interpret customer terms, understand Construction Act implications, and confidently challenge and negotiate unreasonable conditions.
We highly recommend Credit Management Group UK to any construction business looking to strengthen commercial awareness and improve outcomes.”
Josh Loundes, Financial Controller, Environmental Essentials.
Consultancy and process improvement
“CMG UK designed and implemented full Credit Management Procedures and systems and coached our staff so they understood fully their role and bought into the new procedures. Since employing CMG UK, our credit control improved radically to the degree that over the subsequent six year period, we rarely have had any significant problems in this department. A very worthwhile investment.”
Bryan Pullan. Gilling Dod Architects
“CMG UK designed and implemented a functional credit control system which we have adopted religiously since implementation in 2004. They converted our existing system in to a streamlined procedure which reduced our payment period from 92 days to a consistent 45 massively improving our cash flow.
No business should be without such a system and I would highly recommend CMG UK to anyone who doesn’t currently have a working system in place.”
Steve Hunt, Steven Hunt & Associates, Building Services Consultants
Outsourced collections
“We have outsourced our credit management function to CMG UK for several years and see amazing results. Part of our business falls under the scope of the Construction Act as a subcontractor. They helped implement robust processes to ensure variations are captured, applications are submitted correctly with full supporting evidence, and under or delayed payments are minimised. They also played a key role in final account negotiations. CMG UK introduced a disciplined collections process, enabling swift escalation of overdue debt and prompt suspension of services where necessary. They also strengthened our terms and conditions, ensuring clear customer acceptance and reducing dispute risk, while improving our team’s commercial awareness through targeted training.Debtor days reduced from around 110 days to a constant 41 days. Construction is a difficult industry to get paid in, CMG UK is an asset for any business in this industry.”
David Ward, Owner/Director, Oculus Facilities Management
“We employed Credit Management Group UK to outsource our credit control requirements. Being a small company we found it time consuming to constantly chase payment from our Clients.
We found that CMG UK came highly recommended by companies we dealt with in the local area and we wouldn’t hesitate to recommend her for your credit control issues.
We have employed CMG on an ongoing contract and found their service to be exceptional, their fees to be very reasonable and most importantly they appear seamless to our Clients.”
Dave Cornett, Director, Snow Architects