5 Common Excuses For Late Payments (And How To Deal With Them)

How many times have you chased a client for payment, only to get an excuse back? Nothing saying ‘Oh yes! I’ll pay that now’, but instead a laundry list of reasons why they haven’t, and promises to get around to it. It’s incredibly frustrating as a business owner, and can often lead to you writing emails you don’t actually send with the responses you want to give. To avoid it in the future, here are the 5 most common excuses for late payment, and how you can respond in a way that will get money in your bank account ASAP.

“We Haven’t Received Your Invoice”

This is a common delaying tactic, and will often come out once the payment is due. The client will wait for you to chase before telling you they hadn’t received our invoice. Of course sometimes they could genuinely have not received it, but more often than not we see this used as a way to buy some time until they have the cash flow to pay it.

Your Response: Send your clients an email asking for confirmation of receipt of your invoice. You could do this 5-7 days after sending it, or ask your clients to send you an email acknowledgement upon receipt of your invoice. It can help to reattach the invoice to this email as well, so that you can be certain they have received it. This provides and electronic paper trail, which will prove useful later if you have to take formal steps to recover payment.

“The Cheque Is In The Post”

Ok, so it’s highly unlikely that your business is still paid by cheques, but this covers a range of excuses that all essentially mean ‘the payment is on the way’

Your Response: Ask your client for proof of postage or a remittance advice letter from their finance department as proof that the payment has actually been made. If they have genuinely done this, it won’t be a problem, but if they haven’t it is usually enough to prompt action. Offering a variety of payment options (including online and direct debits) will help reduce this excuse, and your need to chase payments.

“We Haven’t Been Paid By Our Clients Yet”

Cash flow problems are a common reason for late payments, and sometimes clients will tell you outright that this is why you haven’t been paid yet. Depending on the nature of your business and the clients business, this may be a difficult one to argue (for example if you are an accountant then you know the financial position of your client, so this argument may not stand up.

Your Response: Assuming that your client has genuine cash flow issues, you may want to offer them the option of staged payments. This means you take a portion of the payment now, and the rest later. This shows willing on the part of the client, and ensures you still get your payments made. If this is a regular issue, consider switching to a full payment in advance model for this client.

“The Person Who Handles Payments Isn’t In The Office Today”

This excuse crops up year round for almost every customer of ours, but it is most popular during the summer and Christmas holidays.

Your Response: Confirm when the authorised person will return to the office, and chase payment of your unpaid invoice on that date. Another option is to ask your client for the contact information of another member of staff who is authorised to make one-off electronic payments, and request one.

“There’s A Problem With Your Work”

This is one of the more common reasons for clients to without payments – they simply aren’t happy with them. Occasionally they will lodge a complaint, with the aim of reducing your invoice or to avoid paying it altogether.

Your Response: If the client mentions their dissatisfaction with your work before the invoice deadline, their complaint is more likely to be genuine, and you can act to resolve it before payment becomes an issue. If this is the case, agree a remedial course of action in writing. To prevent a dispute being used as nothing more than a stalling tactic, consider adding a clause into your T&Cs to the effect of: “Our T&Cs state that complaints about the quality of our work must be made within seven days of our invoice being issued, after which any complaints will be time-barred.”

But above all, with all of these excuses – put down the clients accounts until they pay you. Don’t do any further work until payment has been made, no matter how much you want to, or how much the client kicks up a fuss. Continuing to do work for a persistent late paying client in the hope that they will eventually pay up is not a wise move, and will often end up with you chasing even more money. And if you know a client is a serial late payer, it may be worth considering moving to a payment-up-front model.

At Debtcol, we are here to help you understand why your clients aren’t paying, and change it. We have heard every excuse in the book, and know how to handle them professionally and effectively. If you would like some support in handling late payments in 2020, please just get in touch with us today to arrange your free consultation.