With most businesses now using electronic payments, the old delaying tactic ‘the cheque’s in the post’ no longer applies. Unfortunately, there are plenty of other excuses which can be used by some unscrupulous business owners to avoid paying what they rightfully owe.
Over the years our debt collection experts have heard pretty much every excuse in the book. Here’s a list of the ones we’ve heard most often, along with tips on how to tackle them and expedite settlement of the overdue account.
1. You’ll get paid when we get paid
Debtors sometimes feel they’re entitled to withhold payment on this basis. However, it’s simply not acceptable, unless you’ve already agreed a credit arrangement from the get-go. It could also be a warning sign that your customer is in financial difficulties or having serious cash flow issues.
In this situation, it’s important to be firm and persistent, and a professional debt collection agency will have the authority and tenacity to get results. It may help to insist on having details of the payment that the customer is awaiting from their debtor and when they expect to receive it. This could enable you to agree to part payment of the debt or set a definite date when payment will be made.
2. Our Finance Director is on holiday
Really? There’s nobody else who can sign off on payments? If so, why didn’t the Finance Director approve the invoice before going away? No business should have systems which are reliant on the presence of one individual. What happens about payment of salaries and other important processes? Don’t just accept the excuse and wait. There must be a way you can be paid with authorisation from somebody else in the business.
3. We need more than one person to sign off on the payment
OK, that’s not unusual. However, the same principle applies as above. Why hasn’t that person already signed the invoice off? How long exactly are they unavailable for? To avoid issues like this, it’s important to make sure you’re sending invoices to the correct contacts, which is often a member of the accounts payable team, as well as the person who ordered the goods and services. That means keeping your records up to date.
4. We’ve never received the invoice
Invoices can go astray or end up in spam boxes. However, claiming non-receipt is also a favourite delaying tactic. Again, make sure contact details are up to date and try to get an acknowledgement of receipt of the invoice from the accounts team. Don’t wait 30 days to find out that the invoice hasn’t been received.
5. It’s on the next payment run
It’s strange how payment runs often don’t coincide with supplier credit terms, isn’t it? If your terms of business clearly state 30-day payment, you should be paid on the 30th day or earlier, not one or two weeks later. Make sure you get the customer to accept your payment terms in writing and try to ensure that they pay earlier rather than later. With online bank transfers being relatively quick and simple, it’s surely not impossible for them to make a special payment outside the normal payment run.
Why not get expert help?
If these excuses sound familiar and you’re struggling to overcome them, it could be time to bring in a professional debt collection agency. As well as having the experience and expertise to chase a debt proactively and effectively, they’ll also have specialist software tools which can help them stay in touch with elusive debtors and deliver positive outcomes.
At Redwood Collections, debt collection is our business. We’ll use our experience, expertise and advanced technology tools to chase your overdue debts effectively and give you the best chance of achieving a successful outcome. We can also help with ongoing debt management to reduce the risk of late payment issues. With Redwood on your side, you can challenge those non-payment excuses and help your business Grow Stronger.
