Negotiation Strategy: Regulatory Terms
The video introduces the "Regulatory Terms" strategy in the ADA Platform, explaining that it involves payment terms based on regulations and recommendations governing supplier payments, emphasizing the discretionary nature of their application by procurement or negotiation managers, and cautioning users to independently research and verify the dynamic legal landscape surrounding these terms.
Introduction to Regulatory Terms Strategy
- The video introduces the "Regulatory Terms" strategy, which involves payment terms defined by regulations and recommendations governing the conditions under which businesses pay their suppliers.
Basis of Regulatory Terms
- Regulatory terms are determined based on existing laws, regulations, and recommendations applicable to the supplier's location, home country, or a combination of their home country and size.
Variability Based on Factors
- The terms can vary depending on factors such as the supplier's status as a Small and Medium Enterprise (SME), industry regulations, and regional legislation.
Enforcement and Recommendations
- The video explains that regulatory terms may either be enforced by law or presented as recommendations, leaving the application of this strategy to the discretion of the procurement or negotiation manager.
ADA Platform Assumption
- The ADA Platform assumes that all regulatory terms are non-binding, allowing users to see payment term recommendations above regulatory terms, with the discretion to apply or not.
Opportunity Assessment
- Examining the opportunity based on regulatory terms, an example is given where the maximum regulatory term is 30 days, and the current payment term is 17 days, presenting an opportunity to increase payment terms by 13 days using the regulatory term strategy.
Information Display and Caution
- The video notes that the ADA Platform attempts to provide information on whether legislation is a recommendation or enforced but emphasizes that the user must exercise discretion in negotiating using this strategy.
Cautionary Note on Legal Changes
- Users are advised to consider that laws can change, and the video encourages independent research to verify the current status and applicability of these regulations, highlighting that the displayed information is for reference only.
User Responsibility and Research:
- The overall message emphasizes user responsibility, caution, and thorough research when considering and applying the regulatory term strategy due to the dynamic nature of legal frameworks.
0:00 -The next negotiation strategy we're going to look at is regulatory terms. The regulatory term strategy the terms that are defined based on a set of regulations and recommendations that govern conditions under which businesses must pay their suppliers.
0:16 - So in other words, these are laws on the books based on where the supplier is located, their home country or a combination of their home country and the size of the supplier.
0:28 - For instance, instance. There's a lot of SMEs payment term legislation surrounding when SMEs have to get paid or based on the industry which the supplier falls into.
0:39 - terms can sometimes be enforced or be recommendations. It this strategy is up to the discretion of the procurement manager or the negotiation manager.
0:48 - The ADA Platform assumes that all of the regulatory terms are non-binding and thus you may see payment term recommendations above the regulatory terms.
0:58 - I guess. And it is up to your discretion to apply or not the regulatory terms. When you come to the right and you look out the opportunity in this example on the regulatory terms.
1:10 - It shows In this example, the maximum is 30 days. we're at 17. So that could be a strategy to increase increase.
1:21 - Payment terms, 13 days, by taking advantage of the regulatory term strategy. the ADA Platform does attempt to tell you whether the legislation is a recommendation or enforced, But again it is up to your own discretion to negotiate using this strategy.
1:40 - information is for display purposes only it does go into the specific text of the law. But these laws can change, please do your own research when it comes to these laws, they may still be in effect, they may have changed.
1:57 - So, take caution when using the strategy.