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Garment industry is fiercely competitive due to unpredictable consumer demand and uncertainties arising from the US China Trade War. In order to maintain a strong relationship with customers, manufacturers would allow for prolonged payment terms. This would affect company’s cash liquidity and operating funds.
Our client is one of the Hong Kong top 100 garment manufacturers and they had been negotiated with the US client for over 6 months for a payment in an amount of US$800,000. The negotiation was unsuccessful and iQor RMS was appointed to represent the client for debt collection.
As the US buyer was considering to go into liquidation, iQor RMS immediately approached the debtor for recovering the overdue debt. Our professional and well trained local collectors negotiated with the debtor strategically. In addition, iQor RMS issued a series of demand letters including legal demand to escalate the urgency of repayment. After several rounds of negotiations and compromises, the two parties finally reached an agreeable payment plan in two months. During the initial negotiation, the debtor only agreed to pay 30% of the debt. iQor RMS strived to fight for the best payment plan that the debtor finally agreed to settle more than 80% of the debt within 3 months. iQor RMS took the lead to monitor the whole negotiation process to ensure smooth payment.
The life-cycle of garment industry is turning to be short and rapid. This change in production models has brought challenges to the industry management and healthy cash flow is especially significant. While due diligence and credit checks on new customers are necessary, manufacturer should always beware of existing customers’ financial conditions. As one of the premier global leader of debt collection, iQor RMS has more than 170 years’ experience. Our professional and well trained collectors would negotiate with debtor tactically to secure solid payment while able to maintain the buyer-seller relationship.
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