Credit Negotiations

Marcadis Singer, PA, Florida Collection Attorneys,, continues our series on managing your business receivables, with creating a viable and sound credit policy.  Well educated and informed creditors, smooth the way for the collection process, and increase the probability of successful debt collections downstream if the extension of business credit does not work out.  Marcadis Singer, PA, also provides consultative services to clients, in addition to collections.

 

4.  Be Consistent

There needs to be a process in place, that follows a set pattern.   Every customer or client should matriculate through the same process of being approved for credit, and the same process for processing their account.  Be fair, and consistent, avoiding favoritism.  You never know when you treat someone with favoritism, how or when that becomes public knowledge, and you then risk other companies either following the same path expecting exceptions, or worse, customers feeling that they were cheated and leaving you.

 

5.  Be Organized.

It is called Receivables Management, because it needs to be managed.    The previous point was about consistency, here we are talking about standardized processes.  Every client should follow the same process for getting credit, and the same process for getting business credit terms.

6.  Your Credit Policy Needs to be Visible and Known.

There are few things worse that an ambiguous credit policy, and trying to defend it in court.  One thing that is worse than defending an ambiguous credit policy, is trying to defend an well articulated policy, that no one knew about!   We frequently suggest making your credit terms, how you get credit, how you are expected to pay, public knowledge, even putting it on your website so that there is no question about what your credit terms and expectations are.

7.  Use credit terms to your tactical advantage.

Nothing beats the negotiations!   Use your credit terms to help further your business objectives by leveraging credit terms to increase sales volume, or to get a deal away from a competitor.  Offering terms, without leveraging that risk to better your business, is putting yourself at risk, without an end game to profit from it.

 

Negotiate Credit Policy

It takes two sides to make a deal, two sides to negotiate and two sides to make it go bad.
Gary Bettman
NHL Commisioner

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