Recovering late payments from B2B customers can be a hefty challenge. Discover the top 5 late payment excuses and how to respond them effectively.
Unfortunately, some businesses make up excuses to explain away delays in settling invoices.
Luckily, the majority of these companies use similar reasons or excuses for falling behind on payments.
Anticipating the common reasons or excuses for late payments may help you develop some tactics to reach payment solutions with your customers.
1. The payment is on the way
Ask for proof of payment, the date payment was made, who approved payment, etc. If they have not made a payment, they won’t be able to answer your questions.
2. The person who signs the cheques is away
This is a common excuse around holidays. Find out what provision has been made to sign salary cheques and paying utility bills. Very often, a few signed cheques will have been left to settle important accounts. Put pressure on the person you are dealing with by stressing how important your account is, making them feel they will be going against the wishes of their boss by withholding payment.
3. We’ve lost /never received your invoice – can you send a copy?
Find out if this is the only reason for late payment and offer to fax a copy immediately. If they don’t agree to pay within a couple of days, they are, in effect, admitting that this is a delaying tactic.
4. The computer is down
Ask how often these problems occur and how long faults usually last. If this is a genuine problem, they ought to be willing to send a manual cheque.
5. We are waiting for payment from a large customer
Ask the name and the address of the debtor and when they expect payment.
Your debtor should be able to some form of credit with their bank on the security of
this debt. Suggest that they do this and find out how quickly they can arrange it.