5 Common Late Payment Excuses And How To Deal With Them

late payment excuses

Maintaining cash flow is necessary if you’re running any kind of business. It is important to have a steady cash flow to run your daily operations. But eventually, you will have to deal with late payment excuses from clients who are hesitant to pay on time. They will come up with various excuses to make a late payment. Here are some of the most commonly-used excuses that delay the invoice payment.

“We haven’t received the invoice”

This is one of the most common excuses that clients say to buy them more time to pay. Make sure you resend a copy of the invoice immediately and ask for confirmation of receiving the mail. You can ask the client to send an acknowledgment upon receipt right after you send the invoice. Sending a detailed reminder or notification to your client can reduce this problem to an extent. 

“We’ll pay once we get paid”

Your clients can tell you that they can pay for your goods or services until they get paid. You should not give them more time unless it is stated in the contract. You should demand your payment as per the deadline mentioned in the contract. You would know if they just don’t want to pay you yet or they’re waiting for payment.

 

“Your payment is on its way”

If you have a client who pays their invoice by cheque, the chances of encountering this excuse can be high. In this scenario, you can ask your client for any legit document that proves the client has already made the payment. You could also ask for a faster delivery system or switch to online payments. 

“The person who is authorized to make payment is not in town”

This is a common excuse during the holiday season. Get confirmation on when the authorized person will be back in the office and follow up on your client on that specific date. If he/she is gone for a longer time, ask the client who is in charge for the time being and make an online payment.

“There’s a problem with your product or services”

Ensuring the quality of goods and services you provide is up to the mark is important to run a business. In this case, the client is most likely to withhold the payment until you solve the issue. Otherwise, raise a complaint to get a discount on the product/services that you delivered. If the complaint seems genuine, you will have to address the issue and make the necessary changes.

If they are raising the complaint as a tactic to delay the payment deliberately, you should take quick actions to identify the issue. Mentioning a specific period of time to address the complaints in your terms and conditions. Any complaints raised after this time will be invalid.

Other Tips To Manage Late Payments

  • Always make sure the quality of the goods/services are up-to mark.
  • Sending the invoices on time and automating reminders a few days before the due date to notify the clients. 
  • Charging a late-payment fee will motivate the clients to make payments before the deadline. The client payments should be monitored closely, if they miss a payment once or twice the late payment fees can be overlooked. But late payment fee should be strictly implemented if a client is paying late all time
  • In case there is no response received for the follow-up emails and calls even after multiple reminders, an email should be sent to the client informing all the operations will be on temporary hold until they make the payment.

Late payments can cause cash shortages that can adversely affect the smooth functioning of your business. We hope these tips will help you deal with your clients who pay late.

Get in touch if you need help optimizing your cash flow.

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