Late payments: 4 common excuses clients give for paying bills late (and how to overcome them)

Fed up of hearing excuses such as “your payment is on its way”? This handy guide shows you how to make late payments excuses a thing of the past

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As a start-up or small business owner, you pride yourself on the products or services you deliver to your clients so it can be testing when you receive excuses for late payment.

When chasing down the payment of an invoice, you will likely hear ‘explanations’ which cover everything from late-payment as a result of a company crisis to a supply chain issue.

To help you get paid on time and tackle late-payments head on, we’ve outlined the four most commonly-used excuses by late-paying clients – along with advice on how you should respond.

Read on for tips on how to get your invoices paid and fast…

Late payments excuse #1: Systems error

What they say: “We haven’t received your invoice”

A client who is trying to delay payment will often wait until payment is due before making you aware that they haven’t received your invoice.

Often, a client who is trying to delay payment will wait until payment is due before advising you that they didn’t receive your invoice.

What you should say: “Please can you send confirmation of receipt of the invoice?”

To tackle this excuse, you should send the client an email asking for confirmation of receipt of your invoice – for example, seven days after dispatch.

Alternatively, you could ask your client to send email acknowledgement upon receipt of your invoice. Regardless, this will give you ample time to re-send your invoice if necessary.

Additionally, you could send a reminder email to your client one week before your invoice is due for payment. This will provide you with an electronic paper trail, which will prove useful if you later have to take formal steps to recover payment.

If you notice that your invoices are regularly going astray, you may want to switch to direct debit.

Switching to direct debit prevents late payments by automating your business’ payment process – meaning that your clients don’t have to manually pay your invoices.

What they say: “Your cheque is in the post”

Most business don’t pay clients by cheque anymore but the general excuse is typically based on the principle that payment is on the way.

What you should say: “Please can you provide me with proof of postage or ‘remittance advice’?”

Asking for proof or remittance advice – a letter from their finance department to show that payment has been made – will clarify if the client is being honest and will help you to better understand when you can receive payment.

Instead of this response, you could request for your client to cancel the first cheque and send another one by first class recorded delivery.

Alternatively, you could consider offering your client an online, automated payment option like direct debit. Funds will be instantly debited from your client’s account, leaving you and your team to focus on your work rather than chasing down invoices.

Late payments excuse #2: Supply chain

What they say: “We haven’t been paid by our clients yet”

Sometimes you may find that your client claims they can’t pay your invoice on time because they haven’t yet received payment from one of their clients.

What you should say: “Let’s set up a payment plan”

If your client does have genuine cash flow issues then you may want to work with them to come up with solution. This can include asking them to either set up:

  • Stage payments
  • Part payment now, with the balance to be settled upon payment by your client’s debtor
  • Full payment in advance using a direct debit solution, such as GoCardless.

Late payment excuse #3: Company crisis

What they say: “The person who authorises your company’s payment is not in the office”

You’re more likely to hear this excuse from your client during holidays such as the Christmas and Easter periods, but the excuse can be made year-round.

What you should say: “Please confirm when the authorised person will return to the office”

Once you know the date of the authorised person’s return, you can then chase payment of your unpaid invoice on that date.

OR “Is there a substitute staff member that can action a one-off payment?”

Alternatively, you can ask your client for the contact details of a substitute staff member who is authorised to make a one-off electronic payment and request that one is actioned.

Late payments excuse #4: Dispute

What they say: “There’s a problem with your work”

Client will withhold payment for products or services if they are dissatisfied with them. They may also issue a complaint with the aim of reducing the amount of your invoice or to avoid paying it altogether.

What you should say: “Please can we work to understand your concerns and agree a course of action?”

If your client explains that they are dissatisfied with your work well before your invoice payment deadline then their complaint is more likely to be genuine.

If this is the case then you should work with them to come to a resolution. The best course of action would be to detail your client’s concerns and then agree on a remedial course of action in writing. Following these steps should enable you to resolve the dispute and still be paid within your credit terms.

As a preventative measure to prevent clients using the dispute as a tactic to delay paying your invoice, you should look to insert the following clause in your terms and conditions (T&Cs):

“Our T&Cs state that complaints about the quality of our work must be made within seven days of our invoice being issued, after which any complaints will be time-barred.”

Some final advice on dealing with late-paying clients

If you’re dealing with a persistent late paying client then make sure you don’t do any further work with them until you’ve collected the money that you’re owed. Working with a late-paying client in the hope that they will eventually pay isn’t wise.

If you’re working with larger companies, you can also undertake due diligence by using the government’s free tool here to find out how long it usually takes the business to pay invoices.   

GoCardless gives start-ups and small businesses access to online direct debit. It’s free to set up and you pay just 1% per transaction with a cap of £2 (and no hidden charges). Find out more.

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