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10 Common Excuses for Late Payments

View profile for Janet Moreton
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When you provide a product or service to a customer, you expect that customer to provide payment. If they fail to do so, you can run yourself in circles trying to get it back – often to no avail. Several phone-calls and emails later, you find yourself in a dilemma: “Should I give up, or should I just keep chasing payment, even if it leads nowhere?”  If this sounds familiar, it’s likely that you’ve heard all the excuses under the sun for why the balance due has not been paid. Here we reveal the top 10 most common excuses businesses receive for late payment and how to deal with them.

1. “The relevant person is not available”

If your debtor claims that the invoice is yet to be paid because the director or finance manager is on annual leave or off sick, it may be true – but it shouldn’t stop the balance being paid. Business shouldn’t come to a stand still simply because the relevant person is absent. Ask if there is a way around it; there may be someone in the company who is authorised to arrange an electronic payment through BACS transfer. If not, make sure that you find out precise timings for when the relevant person will be back in the office so you can arrange a new payment date.

2. “We never received an invoice”

According to research from Satago, lost invoices are the primary reason for late payments.

“Well we didn’t receive anything. Maybe there was a problem with your email server?”

This is a classic rebuff you may hear, one used to buy time and put the ball back in your court. Whether it’s genuine or being used to delay the payment further, you should be able to provide proof that you sent the invoice. Remember, due date for payment of commercial invoices is 30 days from delivery, not 30 days from receipt of invoice. When you respond, make sure to state this and ask for a fax number or email address so you can send it through for their attention immediately.

3. “You didn’t tell me when payment was due.”

When selling goods and services, it’s essential your customer agrees to the terms and conditions you have provided. If your terms state that payment is due within 30 days, this cannot be used as an excuse for late payment. Fax or email them a copy of your terms and conditions once more.

4. “I can’t pay you until my customer pays me.”

This is commonly known as ‘the supply chain defence.’ If your customer knew this would be an issue, this is something they should have stated prior to doing business with you. By agreeing to the terms and conditions, your customer now has an obligation to pay you within the time frame specified. Ask if they can make an immediate partial payment and provide you with an exact date that you will receive the rest. If your customer continues to use this excuse and the payment grows later and later, ask who their customer is and contact them yourself. This may shed some light on whether your customer is being genuine, and get you a step closer to receiving the balance owed. 

5. “Our systems are down.”

Establish with your customer how serious the problem is, and how long this will last. If their systems are down or they claim technical difficulties, this is something which will start to affect their everyday operations. Therefore, if it’s true, they should have a procedure in place to make manual payment. Your cash flow should not rely on problems with technology.

6. “I sent the cheque in the post already.”

This excuse is one of the oldest in the book, but is only viable for a certain amount of time. If the cheque does not materialise after a few days, ask your customer to provide you with the following information:

  • Cheque number
  • Address it was sent to
  • The precise value
  • How it was sent (1st or 2nd class)

This should allow you to track the cheque yourself. You could also ask your customer to cancel the cheque immediately and resend another under recorded first class delivery. Once they have done so, request a tracking number so you can ensure it’s on its way.

7. “We’re in the process of changing banks.”

Ah, the classic banking bluff. This may be a genuine excuse for a few days, but anything longer than that and it’s clearly a method to delay payment. Once again, ask your customer for the exact date the switch will be complete and arrange a date for payment.

8. “The managing director passed away.”

If your customer tells you the managing director or CEO has passed away, it’s likely the truth (or your customer has no issue lying about the death of their boss.) Act sensitively but diplomatically – this is a delicate issue, but they are still obliged by law to pay the balance owed. You may choose to allow them time for bereavement, but it’s also important to ask how the business will continue and who will be responsible. Arrange to discuss the matter at a later date, but ensure that this date is secured and not forgotten.

9.  “Our company went into liquidation.”

 While this may be true, don’t simply take their word for it. It may be a scam to avoid payment. Ask your customer exactly how this happened along with the precise date. It’s also worth checking with Companies House if you doubt the validity of the excuse. If your customer claims they are in formal insolvency, ask them which insolvency firm is undertaking the administration of their company.

Contact them immediately, and provide them with the contract your customer signed stating they would pay the balance when the goods or services were delivered. This will allow you to lodge a claim for the money you are owed. At this stage, it’s also worth seeking the advice of a debt recovery solicitor, as they will be able to assist you through the process.

10. “We’re not paying you.”

If your debtor refuses to pay, they must have a valid reason for doing so. It may be that they don’t believe your goods or services were of a high enough standard to deserve payment. In any case, speak to a specialist debt recovery solicitor. They will be able to assess your situation and advice you on your options in proceeding. While some disputes may be genuine, it’s important to note that the ‘dispute’ card is a common tactic used by businesses/individuals looking to buy themselves some time.

From the invoice being “accidentally destroyed” to the finance manager on a trip around the world, customers will give all sorts of reasons for delayed payment. Whatever the excuse, you have a right to be paid on time. If you are struggling to recover debt, get in touch with the debt recovery team at Talbots Law today.