How to respond to common late payment excuses

Chasing overdue payments from customers can be incredibly frustrating, particularly when you’re relying on the money to keep your own cash flow healthy and your valuable time is being consumed. The feeling can be made all the worse when you’re unsure if the excuses you’re being given are genuine.

As a commercial debt collection agency with over 20 years’ experience, we’ve heard a wide range of excuses whilst recovering unpaid invoices on behalf of our clients. Crucially, though, we also know how best to resolve them and secure payment quickly.

Here, we share some of the more common excuses that you may be facing, 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 should 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 ensuring your credit control process includes a contact point to confirm 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.

When the customer says 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.

Where they refuse, or perhaps claim they have already paid but fail to provide any evidence of this and the payment never arrives, you may wish to instruct a debt collection agency. Often, the weight of the involvement of a dedicated third-party is enough to bring a fast and successful resolution to circumstances such as these.

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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 they’re 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. Again, ensuring your credit control process includes a call soon after the goods or services have been provided can assist in identifying any potential issues upfront. 

Try and keep written records of any conversations regarding disputes, and if possible get confirmation that payment will be made once an agreed upon resolution has been carried out.

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 to claim that they have decided not to use the services or goods, 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 viable 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 instalment in a week or so when the money does come through.

Should they come up with more excuses why they can’t do this, again a debt collection agency can add a lot of value. Their expertise in such situations will help to verify whether what they’re saying is true. Where it is, they will work with you and the customer to agree an attainable and acceptable payment plan that’s mindful of everyone’s circumstances, and ensure it is stuck to once agreed.

We’re waiting for payment from a third party

Similarly, they may 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 in accordance with 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 to find out as many details as you can. In the event of absence, try to 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 to 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.

Is resolving customer excuses consuming too much time?

Aside from the frustrations of trying to get a customer to pay an invoice, there comes a point it can be counter-productive to invest more in-house resource to achieve a successful outcome. Consuming too much time on a few customers can mean other invoices aren’t given the required level of attention – and ultimately takes time away from what should be the core focus of the business and people involved.

In these circumstances it can be useful to instruct a debt collection agency to recover the debt. Whilst removing the burden from your business, debt collection agencies can bring plenty of experience and authority to secure payment quickly. They also typically work on a success-fee, meaning you’ll only pay in proportion to what you recover.

At Hilton-Baird Collection Services, we have been supporting businesses of all sizes with their debt collection requirements since 2001, providing a range of debt recovery and confidential credit control services to improve results for our clients and provide valuable outsourced resource and expertise.

To discuss your requirements and discover the difference we can make to your collections efforts, simply contact us today by calling 0800 9774848, requesting a call back or getting an instant debt recovery quote.

Why choose Hilton-Baird?