Tips for Improving Debtor Negotiations (Infographic)

Dealing with debtors is perhaps one of the most complex tasks every business owner must face on a regular basis. Handling difficult debtors can be one of the most challenging experiences of all, as they generally require extensive resource and time to gain a resolution.  When trying to make a customer pay the outstanding account, it is very important to implement several techniques and practices to ensure payment compliance.  It may not be a easy task though. A simple phone call demanding payments may not be enough, as it will more likely alienate a customer even further.

If you’re a business owner yourself, consider yourself lucky for there are some proven ways as to how you can increase the odds of getting paid.

Here are the tips for improving debtor negotiations:

Improving Debtor Negotiations

Tip #1: Start with a reminder

Instead of immediately asking for payment, it is better to remind them that they haven’t paid their invoices yet. People have so many things to think about every day, and there is a good chance that they actually lost or misplaced the invoice or simply forgot to send you a payment. Starting with a friendly reminder either through a phone call or an e-mail is a great way to keep a good relationship with your customers. This tip can be much more effective if your message is a firm but respectful reminder without making any hasty accusations or threats.

Tip #2: Try to figure out the debtors’ reasons

If you want to significantly improve your ability to negotiate with debtors, you must try to figure out the reasons as to why they aren’t paying. Understanding the current situation of your customer not only builds a sense of rapport and trust, but it can also enable you to help them come up with a better payment solution.

Tip #3: Provide them with other payment options, but be firm and direct

Given the scenario that you already gave them other suitable payment options and they still refused to comply, provide them with a chance to suggest a counter-offer. Regardless of what that counter-offer would be, it will give debtors the impression that you are serious and determined in having their overdue account settled. You also need to be firm and direct in expressing the fact that you practice professionalism on your trade and that you have the right to expect payment in return of the goods or services you provide.

Tip #4: Offer your customers a concrete minimum payment plan

You should always have a specific minimum payment plan that you can offer to the most difficult debtors. When it comes in devising a payment plan, make sure that the minimum amount is something that they can realistically pay but should be considerable enough that it won’t take years to pay down the debt.

Tip #5: If all else fails, put them on a temporary repayment plan for 1 month

If your customers are unable propose an acceptable repayment plan or provide a counter-offer to your payment plans (again that are acceptable), it might be prudent to accept a lower amount for a period of 4 weeks.  Accepting a short term amount allows the debtor to commit to pay the debt and does not force your customer to comply with a repayment that they can’t really afford.  Give your debtors a span of 4 weeks to get their finances in order so that you can talk again in a month with the view to obtaining another more favorable payment agreement.

Conducting effective negotiations with debtors is a mark of a competitive and successful businessman. However, if you are still unable to recover your payment after all, it may be the perfect time to get in touch with a professional debt collection agency. Their skills and resources in collecting overdue payments are proven to be effective and will ensure your business is placed at the top of list to be paid.

Brodie Collection Services is a full-service agency offering a multitude of services and is one of Australia’s leading debt collection firms. Our objective is to provide you with expert debt recovery and advice at a price lower than the market cost. Our recovery approach is simple – we strive to get to the bottom of why you’re not being paid, then implement steps to ensure prompt payment.  With 25+ years’ experience in debt recovery, we have undeniable results proving that debtors will pay once we become involved.

With offices in Melbourne, Adelaide, and Brisbane, we can assist with all your collection & recovery, legal support services, and credit risk management requirements.

Visit www.brodiecollectionservices.com.au to find out more about the debt collector services that are offered by Brodie Collection Services or call us on 1300 276 343.

2019-07-10T18:40:35+00:00