If you’ve been in business long enough, you may have come across the term debt settlement or payment settlement. In case you have taken credit in the past but are unable to recover the full amount, you can negotiate with your creditor to settle debt with an amount similar to the complete outstanding. This way, you can free yourself from financial obligations and think forward to make money.
You can approach credit information bureaus like CreditQ that can expedite the payment follow-up process on your behalf. Well, you need some assurance that you are heading in the right direction.
If you’re trying to settle debts on your own, let’s share some tips that can help.
Know Your Debt
Before you foray into your creditor’s territory to announce payment settlement, you should know your debts. Calculate how much you owe to the other party. You should know more about your creditors. Consult your business associates and ask if there’s any flexible arrangement that can work, like paying an amount less than the total outstanding. What is the success probability? The point is to do your homework to avoid being on the list of credit defaulters.
Decide on an Amount
Once you’ve done the legwork, it’s time to decide on an amount that you can afford to pay. Check your business expenses, the daily amount you need to run business operations, including salaries. You should forecast sales and budget accordingly. After you have done all this, decide a particular amount on which you can negotiate. Take note that your payment habits can impact your business credit report in India. If you wish to take credit the next time, you have to take small steps.
Invite The Creditor For Negotiation
After you’ve finalized a budget, it’s time to call your creditors and invite them over for a discussion. You can prepare a pitch that includes your payment terms, duration, and future business plans. Aim at turning the game around. Move from the position of a payment defaulter to a reliable associate.
During the negotiation period, it’s wise to document everything for clarity. You can avoid payment disputes. Also, you should organize your invoices and payment records in advance. And if you happen to renew the contract, make sure you get things documented like the billing and payment cycle. You should also emphasize getting digital receiving of the transactions in the future.
We understand debt settlement can take a toll on your mental health. You may feel stressed or anxious. It’s also common to feel demotivated at times. But you should make consistent efforts to ensure that your business gets back on track sooner than expected.
If you think you can handle the debt settlement process on your own, it’s all good. But if you need professional help, you can contact the CreditQ team to offer valuable insights on the subject. The idea is to find a quick and relevant solution to settle debts and start making money to build a cash reserve.