Are you grappling with delayed payments and the associated excuses? Rest assured, this guide is designed to assist you. Late payments pose a significant challenge to managing cash flow, but like any problem, they are not without solutions. It’s crucial to understand that this issue of late payments is not unique to your business; it is indeed a common hurdle for many small and medium-sized enterprises.
This guide will help you identify and address the 12 most common excuses for late payments prevalent in the industry. Not only will the proposed solutions empower you to counter these excuses, but they can also help lay the groundwork for proactive measures that enhance cash flow, strengthen client relationships, and secure timely payments.
Top 12 Excuses for Late Payment
Here, we present an overview of the most frequently cited reasons for late payments:
Apologies! We Missed the Payment Deadline
This is the most common excuse for delayed payments. It often transpires when parties involved overlook the payment schedule due to various reasons. Setting up payment reminders is beneficial to mitigate this issue. It ensures timely payments, reducing the chances of missed deadlines.
Furthermore, defining a regular payment timetable or enabling automatic recurring payments could be effective strategies. Utilizing invoicing software with a payment reminder feature, such as Zintego, can significantly streamline this process.
Sorry, There Are Problems With Your Order
Encountering this excuse means it’s vital to immediately seek additional clarification. Gathering comprehensive information about the mentioned issues should be your first step. Be diligent in noting down these details meticulously.
Following this, expedite the process of investigating and rectifying these issues. Once resolved, ensure to secure a commitment from your client for prompt payment of the outstanding amount.
We’ve Already Settled the Invoice
This excuse is a classic one. When a client claims to have settled an invoice before its due date, it’s crucial to verify the payment first. Errors in data entry or misinformation about a yet-to-be-processed bank transfer from your client are common culprits in such scenarios.
The issue could also stem from an overlooked detail where the client forgot to inform you about the pending payment. Occasional delays of this nature might be tolerable. To address this, employing a tool that monitors all invoice-related activities and received payments can be extremely valuable.
The Cheque Is in the Mail
This excuse is a common one that customers often use when you’re waiting for a payment, especially if you’re working with them for the first time. Always approach such statements with caution.
Request confirmation from your bank or ask for their assistance in verifying the payment receipt to avoid falling victim to this excuse. Embrace online payments, as they provide a more secure, swift, and verifiable method of transaction, further reducing the chances of such defenses.
The Individual Tasked With Payment Is Dealing With a Personal Emergency
It’s not uncommon for clients to explain away delayed payments with claims of the responsible party being unavailable due to personal issues. It’s essential to verify the legitimacy of this excuse. Investigate who this individual is and whether there are any substitutes stepping in during their absence.
It’s highly unlikely that the company’s operations will be frozen until this person returns. If no alternatives are available, request a meeting with a higher authority. If waiting for the individual’s return is the only way forward, get a firm commitment on the expected payment date and have it documented. If the payment isn’t received on the agreed-upon date, do not hesitate to follow up.
We’re Transitioning to a New Bank
Occasionally, businesses may cite the process of changing banks as a reason for delayed payments. It’s important to recognize that shifting accounts to a new bank is typically a straightforward task that generally incurs a brief waiting period of a few days.
Thus, if you find yourself waiting an inordinate amount of weeks or even months for payment, it’s plausible that your client is simply using this as a tactic to defer payment. Depending on your level of familiarity and existing relationship with the customer, you could consider requesting evidence of their purported bank transition or even permission to reach out to the bank directly for confirmation.
We’re Facing Cash Flow Challenges
If a client cites cash flow problems as the reason for a delayed payment, it’s crucial to establish a dialogue about when they will be able to settle the debt. Consider offering them the flexibility to pay a portion of the amount immediately, with the understanding that the outstanding balance will be paid on a mutually agreed date.
This approach enables you to receive your payment in two installments, which is better than a prolonged delay or potential non-payment. Alongside this, ensure that you provide the client with a receipt for their cash payment, highlighting any penalties applicable if the newly arranged due date is not met.
Bankruptcy Claim
If a business declares bankruptcy, it is essential to obtain a validation of this announcement and identify the appointed administrators. You may need to approach these officials and present documentation to prove that the bankrupt entity owes your company money.
However, if the company is merely ceasing operations but has not filed for bankruptcy, you still have legal recourse. If you believe the firm possesses sufficient assets to satisfy the debt, you can consider litigation as an option to recover the owed amount.
Awaiting Receipt of Goods via Access Zintego
This issue can be effortlessly addressed. It is crucial to maintain secure records of deliveries. In the event a client alleges non-receipt of goods, the signed delivery documents can be swiftly dispatched to them electronically, preempting any undue delays. A business can facilitate a signature guarantee through an online document management platform such as Zintego.
This service enables authenticating signatures via any mobile device, with the documents securely archived on your online account. This ensures accessibility and retrieval of your records at your convenience, irrespective of your location.
We are Engaged in a Significant Project
It’s conceivable that your clients might be experiencing financial constraints due to their involvement in a substantial project. However, it’s prudent to accept such justifications only once they’ve been substantiated with tangible evidence.
Regardless, the silver lining is that if your client provides a legitimate explanation for the delay in payment and communicates a definitive full payment date, you have the reassurance of eventually receiving your dues.
Invoicing Template Errors
Should there be a typographical error on an invoice you’ve issued, your client will likely point it out. If they bring this to your attention after the due date, write them an email detailing the correction and, if payment was made prior to this, request a second transaction.
Although it’s unlikely that a mistake was made in the invoice number, ask for evidence to confirm this. Utilizing Zintego’s receipt for cash payment can help mitigate such typographical errors in future invoices.
We Haven’t Received the Invoice Yet
This claim is frequently used as a strategy to postpone payments, as it can shift the blame onto you, potentially resulting in feelings of guilt. To counter this, it’s crucial to send invoices via email as this provides tangible proof of dispatch.
If you’ve already emailed the invoice and this excuse is still being used, it may be necessary to verify the email address to which the invoice was sent. If everything checks out, it may simply be a case of the company neglecting to make the payment and resorting to justifications.