Top 6 Excuses by Clients for Late Invoice Payment and How to Deal With Them
According to a comprehensive study by MarketFinance, formerly known as MarketInvoice, around 60 percent of all invoices are paid late. The report goes on to reveal that the average invoice is paid six days late and that one-fifth of all invoices are paid more than two weeks late.
This is, especially devastating for a small business owner, who depends on constant cash flow to run the operations smoothly and pay employees and vendors on time. It is hence, prudent to know the top excuses given by clients for non-payment of the invoice and also how to deal with late payment —your businesses’ survival depends on it.
1) “Our check is in the mail.”
Since there is no way for you to verify if the client has posted the check, they might blame the postal system and tell you that the check has not been delivered to you due to the inefficiency of the postal department. This might just be an excuse to buy some time. So, if the payment is delayed for long, it would make sense to take a firmer stand and demand they cancel the previous check, pay you via certified mail, and give you the tracking id.
2) “We have not gotten your bill.”
When you hear this excuse, first of all, recheck the address you sent the invoice to. If that is accurate, send your invoice again through fax/certified mail with the requirement of getting the client’s signature on delivery.
3) “We did not receive the product.”
If your product is a digital file/document, you can quickly send it again. But if it is a physical product, you need to track the shipment and delivery process and get the client’s signature upon receipt.
4) “The person who takes care of this is unavailable.”
This can be heard from the clients especially around holidays. During other days, they might respond with the classic “he/she is sick” excuse. If they are set to return in a couple of days, it is reasonable to wait and reach them to take care of the payment later. However, if the client is unsure of the time, ensure that you find out the contact details of a substitute and urge them to process your payment. You should stress the importance of your account and the fact that payment is long overdue.
5) “We are yet to receive payment from a bigger client.”
One way to deal with this excuse is by having your client pay you in installments. If you realize your client has cash flow issues, you can ask them to make payments ahead of time or at least put up a deposit during future dealings.
6) “The system is down.”
Shifting the blame to technology is a common way to delay payments. Be upfront with your clients, and ask them when they expect it to be resolved. Request them to send a check if they respond by saying that they are not sure when the system will be up again.
Bottom-line
Small businesses can avoid most of these excuses through the use of top-notch invoicing software, such as the one provided by Cloud Books. The client cannot claim that the payment check is “in the mail” or “we have not received a bill” or “the system is down.” Cloud-based invoicing software can keep track of all the transactions and the details are stored in the cloud. The information can be accessed at any time from any device.
For a small business, on-time payments from clients are mission-critical. Hence, learning to deal with late payment excuses efficiently can go a long way in ensuring your success. Crucially, it fosters an atmosphere of mutual respect and sets up the precedent for better future dealings.
Also Read: How to avoid unpaid invoices and the best ways to deal with clients who pay you late
