26-Five Principles of Debt Collection
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Introduction of Credit Management for Overseas Trade

36 Things You Need to Know About Credit Management for Overseas Trade

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26. Five Principles of Debt Collection

There is a common law for successful debt collection, both domestically and internationally. That is the five principles. Whether you are asking by phone or by fax or email, by adhering to these five principles, the possibility of debt collection will increase.

(1) Objective setting

(2) Setting deadlines

(3) Thorough demand

(4) Make it a practice

(5) Confirmation of the results

 

Among these, the most important is to set deadlines. In negotiation with the debtor, be sure to mark off the deadline. The same can be said for payment agreement as well as minor confirmations and small promises. By marking off the deadline, the other party, in boxing term, feels like being pushed in the corner. 

 

In other words, no matter what excuse is said, the next deadline always exists, and when that deadline is reached, a flow of contact from the creditor is made.

 

For example, let's assume that there is such a conversation with the debtor.

 

ClaimantWhen will you be able to pay our invoice?

 

DebtorI cannot promise a payment date now. 

 

Claimant: Then who can promise your payment date?

 

Debtor: Of course, I can, but first I need to check with my financial manager.

 

Claimant: O.K. When will you check with your financial manager?

 

Debtor: Not later than next Monday.

 

And so on, also set a deadline for the confirmation action of the other party. By doing this, it will be an excuse to make a phone call next Monday, and if this promise is not kept, the debtor will be further psychologically disadvantaged in negotiations.

 

Have a habit to keep these small promises. By planting the image of a so-called annoying creditor on the debtor, it encourages them to pay prior to other companies.

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【PDF】Introduction of Credit Management for Overseas Trade

Introduction of Credit Management for Overseas Trade

36 Things You Need to Know About Credit Management for Overseas Trade

This ebook was created as a resource for those who have trouble with diverse trading or want to learn Credit Management in a rational.

 

Chapter (Excerpt)

  • Major Differences Between International and Domestic Transactions 
  • Trade Reference
  • Bank Reference
  • Collection Agency
  • Reasons Behind Difficulty in Recovering Delayed Debts
  • Mistakes in International Transactions Where Japanese Companies are Prone to Fail
  • Customer Analysis ~ 5 C's of Credit
  • Dangerous Signs
  • Five Principles of Debt Collection