7 Tips for Negotiating with Debtors

While having to deal with a customer who hascalm in all your dealings with the debtor is a
defaulted on a payment may prove a tricky task,necessity. It will help to keep your objectives in
there are specific ways to go about the businesssight and prevent repercussions down the track.
of negotiation and collecting from debtors.Firm and not too friendly
However, it is important to note that all debtInitial dealings may be in a friendly, reminding
collection activities must be conducted inmanner but it is important to appear firm and not
accordance with all applicable guidelines andget too friendly. This is a business after all and if
legislation.goods and services have been provided there
Use these tips for negotiating with debtors toshould be no reason not to expect a customer to
produce a positive outcome in getting your debtshonour the debt. Clearly explain the ramifications
paid in a timely manner and maintain customerof non-payment and follow through with these.
relations.Debtors can become accustomed to continuous
1. Start with a phone callfalse threats. Be open to offers from the debtor
Sometimes the quickest, easiest and cheapestand sympathetic to cases of financial hardships
way to negotiate with a debtor is with a simpleIt may be that the debtor is struggling to pay and
phone call. This could be a simple reminder in casewant to make progress payments or perhaps
the bill has been overlooked. You will be able tothey are waiting on money from their debtors. Be
gauge within a few minutes if the customer hasopen to any offers they suggest as long as they
any intention of paying the account. Follow up withseem reasonable and realistic. Sometimes less
lettersmoney is better than no money. Give advanced
The process of using follow up letters shouldn't benotice at every step
overlooked. If you have already sent copies ofAlways give advance notice of the next step in
invoices and reminder notices to no avail, you willyour negotiations and attempts to recover the
need to let the customer know you are seriousdebt. If you feel you need to contact a collections
about getting your money. When a phone call isagency to handle the recovery for you, let the
ignored the next step is to write a letter statingcustomer know you will follow through by a
the details of the outstanding amount and whencertain date.
you expect this to be paid. Demand letters shouldSummary
specify exactly how much is the owing and whatNegotiating with debtors will be an ongoing part of
the ramifications are for non-payment. Be politeoperating any business. By remaining calm and
and professionalprofessional in all your dealings with your
By keeping your tone polite and professional youcustomers you will be showing them you are
are displaying a positive image. While this is aserious about recovering debts. Follow through
proven collection technique, it also assits inwith each step if there has been no response and
maintaining customer relations. Further, you mustuse an agency long before the debt needs to be
not harass or intimidate the debtor. Remember,written off as an expense.
you are more likely to be paid if the debtor is notIf all your negotiations fail, you can always refer
angry or upset. Remain calm at all timesthe debts to debt collectors. Not only are they
If you feel that your negotiations are continuouslyexperts in debt recovery and give you the
resulting in false promises, it could be that yougreatest likelihood of success; they will also
end up feeling frustrated and angry. Remainingprovide their services on a contingency basis.