How To Negotiate On Payment Terms with your clients can be difficult to say the least. You want what is due to you, however, having regard to the impact of the pandemic, we need to start looking at our accounts differently. If you are not willing to negotiate at times, you might just end up not being paid at all.
Here are a few tips on how to negotiate on payment terms and handle those awkward conversations:
- Speak to the right person
When you start negotiating, make sure that you are speaking to the correct person. Sometimes the account’s person you have been dealing with is not able to call the shots and accept arrangements on the company’s behalf. Ensure that you are dealing with the correct person to avoid going back and forth.
Communicate openly about what you want, what you need, what you are willing to negotiate on. Be calm, try stick to the topic, do not be passive-aggressive nor confrontational. Your tone of voice and manner could just influence the negotiations. Remember what you want out of this and that it could be mutually beneficial for both parties. So, stay calm, remember what the purpose of the communication is.
Be honest, play open cards, do not accept something you are going to be bitter about as it might tarnish the relationship between you and your client. Everyone has felt the financial impact, be realistic and honest. Create a platform where you and your client can speak openly about finances, as well as what either party can manage and what you would be satisfied with.
- Be reasonable
Of course, you want to be paid in full, it is due to you. However, you must be reasonable. If you come in too high with your demands you might just scare them off completely and close the floor for negotiation. Be respectful and mindful of what you are trying to achieve.
- Aim high, settle lower
When negotiating, start with at least 50% more than what your minimum limit is. This way, if they accept, you are getting more than what you had hoped for. However, if you come in low, they might accept the offer when in fact they could have afforded more.
Have the debtor start the negotiations so you know where they are at financially too, come in with your highest offer regardless of theirs, but remember that they are also negotiating.
Remember, everyone is trying to get the best offer out of their creditors and debtors. You do not need to accept the first offer you get, it’s okay negotiate. Use these tips to negotiate your way into the best deal that accommodates both parties.
The chances of them paying on time and what was agreed upon is significantly higher when both parties feel accommodated. Making unrealistic arrangements will just lead to late payments, conflict and having to start the process all over again.