Tips Business Professionals Need To Know To Avoid Financial Chaos By Greg Williams

If youre in business, this could happen to you

.

Attorneys request services for which they cannot pay.

You provide services, and then struggle to obtain payment.

Slow payers strangle your cash flow.

Payment issues poison your relationships with clients.

It doesnt have to be that way! The way in which you establish a relationship at the outset of the relationship, to a great degree, dictates what will occur in the relationship, and how resolution will come about when there are challenges. This article delves into some of the aspects that you can control to ensure you and your clients do not end up in a negative situation, as the result of their inability to compensate you for your services.

1.Know with whom youre dealing:

a.Many problems can be averted by not dealing with some people or organizations. Just because someone wants to conduct business with you doesnt mean he is a fit to do business with. If he admits to having financial challenges during your initial contact, you should consider the benefits of doing business with him and the potential hardship that such actions may have on your business. If you have had difficulty collecting money from him in the past, be particularly cautious. You should note this in your database so that if the client returns for more services, you will be forewarned.

b.Weigh the current financial situation that the client may have and recognize the possibility that there may be a collection issue. If it appears that such a situation may loom, install safeguards (i.e. collecting more funds up front, keeping the client on a shorter payment leash, and promptly taking action if payment issues arise). In essence, ask yourself if you have the willpower, staying power, and firepower (resources) to chase a debtor.

2.Establish Rapport:

Once youve evaluated the potential risk of a financial default, if you decide to engage in a business relationship with the client, create a mutual relationship built on trust, respect, and the fact that you need to have funds to keep your business running. Set up the expectation at the outset of the relationship that you expect the client to be a good payer. When you are creating a genuine bond with your client, dont allow the clients financial problems to become yours. Dont act as a bank for your client. In essence, dont inject empathy into the relationship when the client begins to tell you his or her financial tales of woe. During such times, youre setting up the relationship and how interactions will occur. Set the stage appropriately.

3.Recognize Excuses:

a.When some clients are on the verge of experiencing financial challenges, they may begin to hoard resources in an attempt to sustain their own livelihood. Its at this point that you must become insistent about receiving payment and put a process in place to monitor future payments. Dont be caught up in giving more services, with the thought that if you dont, it will hasten the demise of your clients operations and encourage him to pay his bills more quickly.

b.Note body language (nonverbal communication). By possessing the ability to read body language and listen to the nuances of speech, in person and over the phone, you can gain insight into thoughts that clients may not verbally disclose. Such insight will allow you to have a better glimpse into the real situation with which they may be dealing.

4.Use Negotiation Strategies:

a.Numerous negotiation strategies can be employed to counter other strategies that a client might present. The more strategies youre aware of and use in the appropriate situations, the better positioned youll be to thwart the efforts of a client who may have funds, but wish to apply them for other purposes.

b.Identify points upon which you can apply leverage. As you progress in the relationship with your client, be attuned to opportunities where you may be able to apply points of pressure, should a lack of payment make such actions necessary. When possible, withhold delivery of services until they are paid for - in advance. For example, dont turn over a report until the invoice is paid in full. Ask for a retainer for your services and work until the retainer is depleted before asking for another retainer in order to continue to provide services. Be particularly sensitive to the clients deadlines to provide information based on your services, as these occurrences often supply leverage opportunities. Have a policy in place that allows you to apply interest to unpaid invoices. Use the assessment of interest as a negotiating tactic: If you pay this bill in full by the end of this month, I will not apply any more interest. If the client doesnt want everyone to know he has a payment situation, you may consider informing him that its your responsibility to report such actions.

c.Offer a promotion whereby you give the client a payback bonus (rebate) at the end of a specified period if the client remunerates funds, in the manner specified by the agreement. (This becomes a cost of doing business, which means, its a cost incorporated in your overall pricing). Be careful how this is structured. For example, offering a 5% discount for quick payment of a bill may result in a client subtracting the discount from the check, but not submitting the payment within the time frame needed to earn it.

Client relations can be strained when payments become contested. Such actions can obviously lead to bad blood between you and them, which could cause your business to incur financial hardships. In order to avoid such situations, choose your clients the way youd choose your friends. If a client who was previously a prompt payer does not pay a bill, consider this as a danger sign that something is wrong. Has the client run into cash flow issues? Is the client unhappy with the services? Plus, always keep in mind that a certain amount of business will go bad. Thus, the better you manage the potential for bad clients, the more enhanced your bottom line will be and everything will be right with the world. Offer payment plans that are acceptable to both you and the client, for example. Giving the client some flexibility may strengthen your relationship and result in loyalty to you and your organization. Remember, youre always negotiating.

Tips:

Learn to strike a balance between disagreeing and being disagreeable. Try never to create a situation that becomes unmanageable, due to slow or non-payment. Maintain an attitude that conveys the belief that your client will do his best to complete payments on time.

To the degree you can, engage the client as a friend, while maintaining the integrity of the business relationship. If a point occurs when you must discuss a payment situation, personalize yourself and speak from the financial discomfort that such an occurrence will have on you and your business.

In considering with whom youll do business, think about the potential future ramifications of engaging in a business relationship with any entity. In some cases, there may be stop signs at the outset. Notice them, take action on them, and avoid getting burned twice.

Learn more about negotiating to get paid by attending a webinar taught by Greg Williams and Pat Iyer. See details at http://www.medleague.com/teleseminars/negotiating_cash.htm. Learn more about Greg at http://gregthemasternegotiator.wordpress.com/

by: michealclark

POST COMMENT

Payday Loans No Debit Card: Urgent Cash In Hours Without Collateral Business Essays How Can Angel Investors Help You Overcome Your Initial Business Obstacles? Payday Today: Same Day Cash Aid Before Payday Invoice Financing – One Way of Keeping the Business in Progress Cash Loan Today: Suitable Funds Conveniently Made Available Starting A Successful Small Business Fast Cash Loans Fiscal Assistance In Times Of Need How To Start A Korean Fashion Jewelry Wholesale Business Online What Is The Best Way To Create An Outstanding Business Proposal? Why Seo Training Is Relevant To Modern Businesses Lead Management System The Need Of Your Business For Better Business Prospects Ringhorne Ost, Norway, Commercial Asset Valuation And Forecast To 2022 - Aarkstore Enterprise