With the number of cars on British roads now exceeding thirty-one million, it’s hard not to encounter at least one auto centre (the alternative name for a garage) when taking a short drive through town. Franchised auto centres have the backing of a brand name behind them, but what about the small independents? A key expense for any new business is buying enough stock to get started for an independent auto centre, which means carrying a huge range of tyre sizes and brands to fit out anything from an Astra to a Zonda. Just so happens our client is one of the UK’s leading independent tyre distributors, and they are not averse to entering into stocking agreements with fledgling businesses. This debt for £23k is an example of when a stocking agreement goes wrong.
The debtor in question opened their auto centre in Gloucestershire, receiving initial stock on a sale or return basis. When needed, the stock would be replenished. All was well for the first three months; then, the debtor put the brakes on payment. With no communication, our client had little option but to stop deliveries and refer the case to Advocate. In the client’s mind, there had been regular replenishments and no stock returned, so there was no reason for payments to stop.
Upon instruction, Advocate struck up a dialogue with the defaulting auto centre, who claimed to have been communicating issues to the regional account manager. The debtor claimed they had received fewer tyres than invoiced and that some replenishment stock had been the wrong size and therefore returned, but without being credited. Having used one of the better-regarded courier firms, our client was able to provide proof of delivery for each and every tyre. The debtor claimed the signatories were not members of staff or names that were familiar, something which was later conceded as untrue. They also claimed that only 20% of the tyres invoiced had been received and that the total debt should be no more than £6k. These issues were something which the regional account manager had previously addressed using PODs, albeit failing to communicate this to their Credit Control team ahead of Advocate’s instruction.
Sometimes all it takes is presenting the same information in a different way to unlock the door to payment. And this was just one of those times. With PODs in hand and a new perspective on the facts presented, the auto centre conceded that a mixture of temporary staff and poor accounting practices had caused their confusion. These shortcomings cost the debtor £2k in statutory late payment charges on top of the £23k principal debt recovered four days after our instruction.
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Tyre Debt of £23k Recovered in Four Days With the number of cars on British roads now exceeding thirty-one million, it’s hard not to encounter
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