By Andrea Schlack & Robbie Burch
The job is done and delivered – Your company expects payment – but instead of seeing green, you are now seeing red because the customer has claimed defects and damages, disputing what is due you. Sadly YOU now have to determine ‘what to do?’
Always remember to stay calm, and remain focused upon resolution. Sometimes it requires little effort other than an explanation, while other times it could be more complicated. There are times when you may have erred, while sometimes it could be caused by a customer’s blunder, but when expectations are disproportionate to the circumstances and everyone is busy ‘pointing fingers’ rather than seeking solutions a ‘little’ problem can become exaggerated and far more difficult and expensive to resolve.
Printing Industry Credit Bureau’s D.O.T.S method
of conflict resolution can help even in
the most difficult circumstances.
DETERMINE THE NATURE OF THE DISPUTE:
Is there a valid basis for the dispute? Did you make a mistake or is it possible the customer does not understand the process or is the customer’s complaint born of convenience to create profit at your expense.
- What is being disputed?
- Who caused the failure?
- What is the cost to repair or replace?
- What documentation do you have? — handshakes are often forgotten in battle.
Placing the emphasis on solutions, over nit-picking between tiny details, is an effective way of putting expectations in perspective. What you want vs. what you can get should always be considered – Solutions garnered through logical outcomes rather than emotional outbursts simply saves money.
Consider this – What happens when you expect more than the customer is willing to give? How much are you prepared to lose proving you were right? Had you given the proverbial inch and found that common ground, could you have gotten future work to offset the temporary losses?
- A dispute, whether credible or not, must be addressed immediately to contain damages.
- Take time to gather the specifics of the dispute, from both the producer’s point of view and the buyer’s point of view.
- Evaluate the facts and remain unbiased.
- What can you do to mitigate the damages?
- Remember mistakes happen –taking responsibility when appropriate shows your ethics.
- No matter who erred find common ground.
- Good solutions will determine the outcome and help maintain profits.
TAKE AFFIRMATIVE MEASURES:
Once the nature of the dispute has been determined, and solutions have been offered, affirmative measures must be taken in order to ensure similar problems do not re-occur.
- If the error was yours identify the cause and fix it! Make sure to take appropriate action to prevent similar occurrences. Remember, a mistake only remains a mistake when a lesson is not learned.
- If the error is attributed to the customer having caused the problem, no matter the nature, take time to help them fix it so they do not repeat the mistake again. Educating the customer to better practices makes for a better relationship in the future.
- If it is determined the dispute is one concocted for ill purposes to deprive you of your rights, contact Printing Industry Credit Bureau immediately for assistance.
STATE THE AGREEMENT IN WRITING:
Written solutions simply protect everyone from ‘forgetful memories’. Someone true to resolution will be appreciative of putting matters to contract, while others with a more dubious intent will balk!
- Once a common solution has been reached put the agreement in writing requiring signatures.
- Use ‘satisfaction and accord’ language along with mutual releases, such as ‘Upon payment of $—- to be received by (date) the undersigned parties agree to accept $– as full and final settlement of claims due, and upon payment as agreed, we each release one another from any further claims or liability’.
- State the payment terms as agreed and use deadlines to avoid the ‘forever’ scenario. When you say we will accept $— as settlement and do not state when payment is expected, there is a presumption it could be days, weeks, months, or even years – it leaves you vulnerable, and YES—PICB has seen this argument used in prior cases.