Priority service offered in a settlement needs a workable limit
Price and limit an ongoing priority-service commitment offered as a non-cash concession during debt negotiations.
Corporate Recovery Partners
01 / 06
The concession sounds inexpensive
To persuade a customer to resolve an overdue account, you offer priority support on its future jobs. No immediate discount appears on the invoice, but the promise can still consume capacity. Establish what priority means before using it as a bargaining point. An undefined commitment may become more expensive than the concession you intended to avoid.
Specify whether the offer concerns response time, booking order, telephone support or attendance. Identify the period, sites and people covered. Keep emergency and safety arrangements separate and obtain appropriate advice where necessary. Do not promise attendance that the business cannot deliver or imply that an administrative priority replaces work required under an existing contract.
Business.gov.au's contract guidance recommends setting out the work, responsibilities and payment arrangements clearly. Apply that discipline to the additional service promise. Ask the adviser preparing the settlement to explain its scope and relationship to existing obligations. A phrase such as premium treatment is not enough to tell the scheduler what has actually been agreed.
Imagine two clients need the same qualified technician on one morning. Giving one customer an unrestricted first call may delay other work or require paid backup. Ask operations to price realistic demand and identify the capacity limit. The value of the concession should include the work it can displace, not just the minutes spent answering the initial request.
Discuss the duration, any usage cap and what happens after that period through the proper contractual process. Record which services remain separately chargeable and how bookings are confirmed. Do not rely on an informal intention to withdraw priority later if the written settlement creates a different obligation. Have uncertain wording reviewed before it becomes a promise.
Compare the concession's operating cost with the expected recovery benefit and the alternatives. If proceeding, give the scheduling team the agreed limits and retain the documents. A useful non-cash concession is specific, costed and deliverable. It should help resolve the debt without creating a second dispute about what priority service was supposed to mean.
