Negotiation as a Debt Recovery Solution

Posted on May 1, 2013 | 0 comments

When it comes to debt recovery, there is this inevitable and powerful tool that you already have: The utilization of negotiation. Every time you try to communicate to a customer about their late payment you are negotiating. Every client case is different and they may have a valid reason as to why they are in debt. You should try to understand their situation and weight it on how much you need the payment to arrive at an acceptable terms of payment. This will benefit both you and your client.

Your needs: Your first priority
In negotiation, you should first look into your needs. Evaluate what would work for you and where you stand in the situation. Is this customer important to you? How does your relationship with them stand? Can you be flexible financially? Once you have looked into your situation this is the time when payment arrangements will be possible both satisfying your needs and your client’s ability to pay.

Your Client’s Situation: Understanding their place financially
Your customers will be the ones paying you. Without understanding their position, it would be impossible to see how you can get paid immediately. Verify if they are making excuses or is stating the truth. Bank accounts and cash flows will provide you with the verification. If their answer as to why they didn’t pay you is something not as truthful as they say, then you can look into solutions much easier like handing them invoices if they claim that they didn’t receive any.

In a negotiation, when there is resistance in any of the parties, the benefits and consequences of arriving at an agreement should make them oblige. It would always be helpful to give those positives rather than the negatives because then they would see how the agreement would be a benefit to their business.

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