How to respond to common late payment excuses
Chasing a payment can be incredibly stressful, particularly when you’re relying on the money to keep your own cash flow healthy. This stress can be made all the worse when you feel you’re being deceived or delayed with excuses.
With years of experience in debt collection, you can be sure we’ve heard some of the most weird and wonderful excuses around. However, there are also a large number that we hear on a daily basis.
Knowing the right way to approach an excuse can help you keep calm and navigate the situation to get the best outcome possible.
Here are some of the more common excuses that you may face, and the best ways to get around them.
We didn’t receive your invoice
Despite being frustrating, this excuse is actually one of the easiest to handle and avoid altogether in the future.
First of all, take a direct email address to send a copy invoice to immediately, and be sure to confirm receipt.
When doing so, take the opportunity to ask your customer for payment as soon as possible as, even if they genuinely didn’t receive your invoice in the first place, your terms will still stipulate that payment should be made within a certain number of days after the goods or services have been provided.
The next thing to do is to check how or why the invoice may not have been received. Was it sent to the right person? How were those details obtained? Was there a mistake or technical issue in your invoicing process? And are any other invoices or customers affected?
In the future, make this excuse redundant by confirming the invoice has been received immediately after it has been sent.
The payment is on its way
The classic ‘cheque in the post’ excuse may have some new variations based on modern payment methods, but it’s still a difficult excuse to verify.
While it may be genuine, it could be just another tactic to further delay payment.
You can try asking your customer for a ‘remittance advice’, a letter from the finance department confirming that payment has been made. If they aren’t willing to provide this, or delay doing so, you could have reason to believe they aren’t being honest.
If they say they’ve sent a cheque, see if they would be willing to pay instead by a more immediate method, such as bank transfer, as it would be safe to assume the money is available in their account.
If they instead claim they have already paid but fail to provide any evidence of this and the payment never arrives, you may have to consider reaching out to a debt collection agency or similar to pursue the debt.
There’s a problem with the invoice/goods/service
Another common reason for clients withholding funds may be because they are disputing something in the invoice or are not happy with the goods provided.
It’s best to try and find out about any disputes as early as possible so that you have time to rectify anything you can at your end.
Try and keep written records of any conversations regarding disputes, and if possible, get confirmation that once an agreed upon resolution has been carried out then payment will be made.
If only part of the work or invoice is disputed, ask for payment for the undisputed part while the dispute is being resolved.
The customer may also try and claim that they have decided not to use the work or haven’t used it yet. Be sure to challenge this immediately. Refer back to your contract if possible, which should make it clear that the company is paying for your time/product regardless of how they use it.
We don’t have the funds to pay
Although your heart may sink when you hear this from a customer, there are actually still some good options when it comes to moving forward.
Try and find out when the client feels they will be able to pay. Often, they’ll tell you that they should have the money in a week or two. Then try and find out how much they are currently short by.
Ask them to pay the difference now and make a second installment in a week or so when the money does come through.
We’re waiting for payment from a third party
Similarly, they may try and tell you that until they receive payment from a third party, they won’t be able to pay you.
Be quite firm in this case, explaining that you are still expecting to be paid on time as per your terms and conditions.
As per the above example, if they are adamant they are unable to pay the full amount at present see if you can get an initial payment and the rest transferred once the third party has paid. But if this isn’t possible, be sure to call again as soon as the third party is due to pay.
An internal issue is preventing us from making payments
This could cover a range of internal complications, such as sickness, holiday, system failure, fire or even a senior team member passing away.
While some of these issues may need to be handled more tactfully than others, the basic process can still follow the same structure.
The first step should be to try and find out as many details as you can. In the event of absence, try and find out who is able to authorise the payment and when exactly they will next be available.
If there’s a system or technical problem, enquire as to whether there is a way to work around the system to get the payment processed. If not, ask what steps they have taken and when they expect it to be running again.
In a more serious situation, try and ascertain whether the customer will reasonably be able to continue trading. It may be that in these extreme cases recovering full payment becomes impossible. By getting the details and making sure that the information you’re given is correct, you can prepare a plan of action going forward.
Are you still struggling with a customer who won’t pay, no matter what you try? Our outstanding debt collections team can help. Just reach out by calling us on 0800 9774848 or request a call back here.