Late payers can be detrimental to a small business.  All it takes is a few unpaid invoices to put pressures on cash flow.  Many of the excuses seem plausible enough but can often be early indicators of a delay to payment.

It is therefore critical to keep on top of debtors and look out for the signs before it becomes too late.  The longer a debt is left, the harder it can be to recover payment – especially if your customer is experiencing cash flow problems or worse. 

As a debt collection agency, we’ve heard every reason in the book.  Here are five of the most common telling signs that your customers may be delaying payment with expert advice on how to handle those excuses for prompt debt recovery:

  1. We haven’t received the invoice/we need a copy
    Everyone has heard this common excuse when chasing payment of an invoice.  Whilst this popular stalling tactic is typically used to delay payments by a week or two, it is worth keeping an eye on the account.  Always send the copy invoice straight away and make sure you send it electronically and by post to a named contact. Ask for a specific date of payment and keep on top of communications until you receive settlement.
  2. The person who deals with accounts is on holiday/not in today/in a meeting
    This is a popular excuse year round but especially during the holiday season.  Whoever you are speaking to should know basic details so don’t be pushed off the phone call.  Ask when the next payment run is and check that your invoice has been authorized for payment.  Take the name of the person you spoke to.  If no one can help you, find out exactly when the account person will be returning to the office and call back at that time.  Ask for a direct email address.  Follow up every call/message with an email to the accounts person summarizing your reason for calling with the date and action.  This will serve as a record of your attempts to collect payment should it require further action.
  3. It’s out for authorization
    Whilst this could be a genuine and valid reason, you should stay on top of the debt collection. Find out who needs to authorize the invoice and contact them directly to give them a nudge.  Don’t be afraid of jeapordising your customer relationship; if the invoice is seriously beyond your payment terms, the relationship isn’t as valuable as you think. Try to have an open and honest conversation with your contact to find out why the invoice has been delayed. Always aim to establish a specific action from each phone call. Follow up every conversation with a summary email of who agreed what and when.
  4. Our accounts system is down
    Computers can be unreliable and you will need to give your debtor the benefit of the doubt with this one.  Whilst the person on the end of the phone may not be able to confirm if your invoice has been authorized, they should be able to tell you when the next payment run is. Ask how quickly they can pay your invoice on receipt of an authorization.  Take a name and call back the next day; it is unlikely that the system will still be down by the next day. Stay on top of it.
  5. No response to phone calls, letters, messages or emails
    Unless your customer has suddenly disappeared (which can happen), a lack of response is often a serious warning sign that your invoice won’t be paid.  If you are receiving no response to communications, you must take further action.  Avoidance is a clear sign that your customer is having problems paying your invoice.  This is the time to send demands and inform your debtor that further action will be taken.  Always aim to get confirmation of receipt of invoice at the very least.  If you still don’t receive payment, you should consider outsourcing the case to a debt collection agency or trace agents.  Don’t leave it too late or your contact could be too difficult to trace.

If you have heard any of the reasons above, don’t panic.  It is essential however that you keep a record of your conversations with each debtor to monitor the frequency of those reasons for non-payment.  Some Accounts Departments use them as the standard brush-off and typically pay a week or so later.  By monitoring your accounts, payment dates and conversations, you’ll be able to identify those companies suffering genuine financial problems and those simply lengthening the payment terms to suit their own balance sheet.

There are ways to put your company in a strong position by setting the right expectations up front.  Make sure you read our next debt collection blog to find out what you need to do to be first in line for payments or contact our debt collection experts at P&J to find out more.

Contact Information

P&J Consumer Debt Services
Maylands Business Centre,
Redbourn Road,
Hemel Hempstead HP2 7ES

Telephone: 01442 848500

Important Information

Privacy Policy
Data Protection / GDPR Policy
Website Terms & Conditions

P&J are regulated and authorised by the Financial Conduct Authority for Accounts under the Consumer Credit Act 1974

© P&J Consumer Debt Services 2022
VAT registered No. 349 1988 07
Website Design by NOW Design