Sector

Debt recovery for wholesale and distribution.

Wholesalers and distributors operate with trade credit as the central feature of every customer relationship. The credit account is, in effect, an unsecured loan to the buyer for the time between delivery and payment. When buyers extend that loan unilaterally by paying late, the wholesaler's working capital absorbs the cost. The Late Payment Act, well used, transfers that cost back where it belongs.

The wholesale payment model

Wholesale customers typically operate on a trade credit account: agreed credit limit, agreed payment terms (usually net 30 or net 60), monthly statements summarising open invoices. The wholesaler delivers stock against orders raised within the credit limit and bills monthly. The buyer pays against the statement.

Three patterns of late payment dominate. First, statement disputes: the buyer queries an invoice on the statement, refuses to pay the entire statement until the query is resolved, and the wholesaler's cashflow stalls on the full statement balance. Second, credit limit overruns: the buyer pushes the account past the credit limit, the wholesaler is reluctant to suspend deliveries because the relationship matters, and the overdue balance grows. Third, sale or return claims: the buyer claims the stock did not sell and returns or refuses to pay for it.

The contract is the recovery foundation

Wholesale supply almost always operates under standard terms of business set out in a credit account application or a master supply agreement. The terms typically include:

Payment terms (net 30 / net 60 / month‑end plus 30).
Late payment interest charges (often 4 percent above base rate, sometimes higher).
Retention of title until payment in full (Romalpa clause).
Suspension of deliveries on overdue balances (a powerful commercial lever).
Personal guarantees from directors of small buyer companies.
Set‑off restrictions limiting the buyer's right to net out claimed credits.

The Late Payment of Commercial Debts (Interest) Act 1998 applies to every B2B wholesale supply on top of the contract. Statutory compensation, statutory interest, and recovery costs are recoverable from the buyer in addition to the principal.

Retention of title and stock recovery

The single most important clause in wholesale terms of business is retention of title. Where the clause is properly drafted and the buyer holds unpaid stock, the wholesaler retains a proprietary interest. This entitles the wholesaler to enter the buyer's premises (with consent or by court order) and recover the unpaid stock.

The scope of the retention depends on the clause's drafting. Simple RoT clauses retain title in the specific stock until that stock is paid for. "All monies" clauses retain title in any stock until all amounts owing on the account are paid. The latter is materially stronger and is what well‑drafted wholesale terms include.

RoT in wholesale matters is rarely exercised in practice. The threat is usually enough. We reference the clause in Letter I where it is in force; the buyer's directors, faced with the prospect of stock being repossessed, settle.

Statement disputes and the right answer

The most common stalling tactic in wholesale recovery is the statement dispute: the buyer queries one invoice on the statement and refuses to pay the entire statement until the query is resolved. This is procedurally weak. A buyer's obligation is to pay all invoices that are not in dispute; refusing to pay the entire statement because of one queried line is not commercially or legally defensible.

We approach statement disputes by separating the disputed line from the rest. Letter I demands payment of all undisputed invoices on the statement, with statutory entitlements on top. The disputed line is held to one side pending resolution. This usually produces immediate payment of the bulk of the statement, with the dispute on the remaining line resolved separately.

Suspension of deliveries

Most wholesale contracts give the supplier the right to suspend further deliveries while the account is overdue. This is a powerful lever because the buyer's own customer base depends on the wholesaler's stock. A buyer who runs a retail or trade business cannot afford to lose the supply chain, and will usually settle to keep the deliveries flowing.

We do not advise on the suspension itself; that is a commercial decision for the supplier. Where suspension has been notified, we reference it in Letter I as a statement of fact. Where it has not been notified but is contractually available, we mention the right.

Specific wholesale clauses we look for

Retention of title (preferably "all monies" rather than simple).
Set‑off restrictions and tendering provisions.
Late payment interest charges in excess of statutory.
Suspension rights and notice periods.
Personal guarantees signed at credit account opening.
Choice of law and jurisdiction (especially for cross‑border supply).

Personal guarantees

Many small‑company buyers signed personal guarantees from their directors at the time of opening the trade credit account. These guarantees are often years old and forgotten by the buyer's directors. Where one is on file, the wholesaler has direct personal recourse against the guarantor for the full balance of the company's overdue account.

We always check for personal guarantees at intake. Where present, we reference them in correspondence. Most directors who have personally guaranteed their company's account settle the company's debt rather than risk personal enforcement.

Our approach to wholesale debt recovery

Our intake form for wholesale matters asks for the credit account application and terms of business, the unpaid statement, the personal guarantee if signed, any statement queries raised by the buyer, and the buyer's payment history. We assess within twenty‑four working hours.

If we accept, Letter I issues the same day. It cites the Late Payment Act, the contractual payment terms, the retention of title clause, and any personal guarantee in force. Recovery costs are payable by the buyer.

Most wholesale buyers settle within Letter II. The combination of retention of title threats, suspension of deliveries, and personal guarantee enforcement creates more leverage than most other sectors. Recovery rates in wholesale matters are typically among the highest we see.

Common questions on wholesale debt

The buyer is querying one invoice on the statement. Can they withhold the whole statement?

No. The contractual obligation is to pay all undisputed invoices. Withholding the entire statement because of one query is not a defensible position.

Can I repossess unpaid stock under a retention of title clause?

If your clause is properly drafted (preferably an "all monies" clause) and the buyer holds unpaid stock, yes. We assess the proprietary claim at intake. In practice, the threat usually settles the matter without needing to exercise the right.

The buyer has gone into administration. What happens to my retention of title claim?

It survives. A properly drafted RoT claim takes priority over the unsecured creditors in administration. Engage with the administrator promptly with documentary evidence of the contract terms and the unpaid stock.

What if the personal guarantor moved abroad?

The guarantee is enforceable wherever the guarantor is, but enforcement abroad is more complex and may require foreign court proceedings. We assess the practicalities at intake and advise whether the guarantor's location materially affects the recovery prospects.