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7 Late Payment Excuses & How To Deal With Them In Debt Recovery

Late payment is a common problem for all businesses. Large companies aren't excused from urging businesses to pay suppliers on time and calling for small firms to pursue those who put them at risk by delaying this frustrating everyday occurrence either, and they too face the battle to receive payments on time. Here we reveal the most common excuses for late payments and how you can deal with them.

The Invoice Seems To Be Missing

Whether it was the office dog who ate the invoice or sheer negligence, lost invoices appears to be the most common excuse for payment delays according to research from credit control business Satago. Keep a paper trail of when you sent an invoice, and all your communication with a debtor – just be sure that you did in fact send the invoice. These days many businesses operate digitally – so make sure you email invoices to the correct department, with the relevant booking numbers included, to make payments easier. To be doubly sure of receipt: it never harms to send it in the post too. That way debtors have no excuses.

I Thought We Had 60 Days Not 30!

If your T&Cs don't clearly state a payment period, you could be at the receiving end of this excuse. Business and Enterprise Minister Mark Prisk, from the Department for Business, Innovation and Skills (BIS), says it is hugely important that all businesses, particularly small firms, establish clear payment terms to ensure they get paid on time and successfully manage their cashflow.
When speaking with your debtors, remind them of your payment terms and the possibility of being charged interest under the government's Late Payment of Commercial Debts (Interest) Act 1998. For invoices that are not paid on time, it enables you to claim interest, compensation and (for orders placed after 16 March 2013) your reasonable costs of collecting the debt where these exceed the compensation. Interest can be claimed at 8% over base together with debt recovery compensation at the rate of £40 - £100 per invoice.

We Definitely Didn't Receive The Invoice

Receiving an invoice late or never actually accounts for 44% of the excuses given to small businesses awaiting payment, according to a recent survey by credit control specialist Satago. A lot of company owners, especially SMEs, just don't like doing credit control. They don't take it seriously and they don't prioritise it", says Steven Renwick, Satago's chief executive.

I'll Pay You When I Get Paid

Your debtors may genuinely be waiting on payment from another person or company. Agree a strict deadline as to when you expect payment and, again, remind them that you are entitled to charge them interest under the Late Payment of Commercial Debts (Interest) Act.

I Sent The Cheque Last Week

If a debtor has legitimately sent a cheque you should be able to track that in some way. Request the cheque number and, or ask your debtor to cancel the initial cheque and resend it first class recorded delivery. Once they have done so, insist on having the tracking number so that you can locate its whereabouts and ensure it reaches your office. For future payments, update your T&Cs to include details on sending cheques. State they must be sent recorded, first class and the cheque number and tracking reference should be shared with you as soon as they have issued the payment. Even better: ask them to pay by BACS so the money hits your account right away.

We're Not Paying You

Your debtor may claim the work was 'never signed off' or simply refuse to pay without giving you a just reason behind their decision. If you find yourself in this situation, seek advice from a debt recovery solicitor who will be able to review your case in detail and guide you on how to collect your debts. To protect yourself against these types of claims in the future, ensure you have a signed contract before you begin work.

The Boss Is On Holiday, So We Can't Pay

A business should still be able to operate in the absence of a boss, especially for such a short time frame as a holiday. Request, if you're not doing so already, to speak to a senior member of staff.  Advise them on alternative payment methods, if this helps them to action a payment. Gently remind them that their boss will probably not like the incurring interest on the late payment either if they continue to withhold.

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