Financial Performance

In B2B environments, claims can be classified into five categories: force majeure, contractual, regulatory, changed circumstances and equitable adjustments. While force majeure and contractual claims are based on clear contractual grounds and could be dealt with legally, the other categories require a more business-oriented and negotiation-focused approach. They usually arise from unforeseeable events, cost increases, or regulatory changes that are not clearly regulated in the contracts. The key to successful claim management is controllability of the cause, data quality, financial traceability, and negotiation skills in dealing with the business partner.

The processing of supplier-to-customer claims requires a high degree of competence. It begins with their identification across all phases of the lifecycle of the products, their quantitative and qualitative assessment, and their classification into contractual or negotiable claims. The preparation of the interactions with the customers includes the definition of objectives, the evaluation of risks and the development of strategies and tactics. Execution focuses on implementing the released strategy and handling customer objections. It emphasizes proactive leadership and appropriate communication. Intermediate and final results are documented, lessons learned are formulated and exploited.

Negotiating claims may require the involvement of motivational or consequential levers to ensure that satisfactory results are achieved. These may include the reconsideration of financial parameters such as price agreements or payment terms. But they can also involve operational aspects such as flexibility and delivery conditions, or strategic aspects such as cooperation arrangements. Other resolution options, e.g. third-party mediation and/or arbitration, can also be addressed, usually with the aim of finding ways of avoiding them, in the interests of both parties. The various levers suggested highlight the importance of the flexible, strategic alignment and proactive management of such negotiations.