Whether it’s that the dog ate their invoice or they were ‘just about to make the payment, honest’, nearly every business owner has been on the receiving end of an excuse for a late payment at least once in our careers.
However, as amusing as some of the excuses may be, late payments can be really damaging to small businesses where it can be harder to make up the shortfall caused by missing funds. To help mitigate damage caused by late payments in the future, here are the five most common excuses we’ve come across, what they really mean, and how to ensure they don’t prevent you from getting paid.
“Oh, didn’t you receive our cheque?”
AKA: Whoops, whoops, whoops, I need to send that cheque out.
Sometimes followed by, “I can cancel it and organise a bank transfer instead, if you like?”, which usually means the cheque was never sent out in the first place! Yes, it’s this old chestnut; despite the fact that most of your clients now pay by bank transfer, there’s always that one customer who relies on a good, old-fashioned cheque (or relies on it as an excuse, anyway). If a client has a record of this kind of excuse, try to request card payment in the future.
“We have no record of that invoice, could you resend?”
AKA: I have your invoice right here in front of me but I can’t pay it now!
You know they have it, they know you know they have it, but they’re going to tell you they don’t have the invoice anyway. There’s not much you can do about a late payer who’s lying except to make sure you resend the invoice right away (and with shorter payment terms, if possible) then double check that they received it so they have no excuse to delay payment further.
“I’ve passed this over to accounts.”
AKA: I was suppose to pass this over to accounts when you sent it but I forgot.
When in doubt, blame accounts! At least that seems to be the motto of many a late payer. If the person you’re dealing with isn’t responsible for finance, it can be a good idea to get an email for whoever is, so you can send your invoice direct to accounts and avoid this excuse.
“Payments are usually made on a date that is very far away from today’s date.”
AKA: I’m going to need another month.
Ah, the old ‘payment run’ excuse, normally used by late payers to put off payment for another week or month. Make your payment terms very clear on your invoice and point out that they are not subject to anyone else’s payment dates or runs. If the situation gets too dire you can always point out how much interest your invoice will accrue by the time their payment run comes around…
“No one’s in accounts today, sorry.”
AKA …and there will continue to be no one in accounts until we want to pay you.
Commiserations, you’ve been stonewalled! An absentee accounts team means there’s nothing you can do until said team or manager returns – which might be never according to your correspondent. This is a tricky one to get around but, if you’re getting this excuse regularly, try requesting direct debits in the future. These will go out automatically so no accounts personnel required!
So what do you think? Do you recognise any of these excuses? If one or more of them seem all too familiar and you feel it’s time to look into Direct Debit collections, get in touch with us to apply.
