Negociate a payment plan

Your client has cash flow problems and has the greatest difficulty to pay your invoices.

He may ask you a payment plan as he is unable to fully pay your bills. A bad compromise is often better than a good legal action so this possibility should not be rejected under some conditions.

Set up a payment plan

What are the prerequisites for a payment plan?

Require an immediate partial payment even of a small amount in order to get a proof of the willingness of your client to honor his debt,
Shorten to the maximum the duration of the schedule of payment,
Confirm the agreement by a writing contract signed by both parties. It will have a value of an acknowledgment of debt if you had to conduct a subsequent lawsuit to get paid,
Get upon the signing of the agreement checks (or bank endorsed bills of exchange) to cash in accordance with the schedule deadlines.

If your client whish to honor his debt, it is often in your best interest to accept the establishment of a payment schedule.
You shall define conditions that are realistic for your client (he must be able to comply with the agreement) and for your company whose cash is certainly not infinitely expandable.

The signature of a contract (download tools below) and getting checks or bills of exchange gives you the best chance to finally being paid, except in cases of insolvency proceedings your client.

The establishment of a payment moratorium is a clear confession of cash flow problems that can be serious. It is therefore necessary to trim and reduce your risk with your client. This translates into more restrictive payment terms (deposits, cash with order, reducing the time of payment ...) and a decrease in credit limit.

Next: get delay penalties

Tools download:

Agreement to compromise debt

Contract letter of payment plan confirmation

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tools to download

Agreement to compromise debt