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 step : Time and collection management →
Tools download:
Payment plan agreement template to use to confirm the agreement made by the seller and the buyer about unpaid invoices.
It can be considered as an acknowledgment of debt which can be used in case of later legal action.
It can be considered as an acknowledgment of debt which can be used in case of later legal action.
Template of a payment plan contract letter. Using this contract is key when you agree with your customer on a payment due to financial difficulties.
It allows to formalize customer commitment.
It allows to formalize customer commitment.
Template of a payment plan contract letter in french. Using this contract is key when you agree with your customer on a payment due to financial difficulties.
It allows to formalize customer commitment.
It allows to formalize customer commitment.
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