How To Overcome Late Payment Excuses

The table explains how to overcome common late payment excuses that you may receive from debtors that owe you money, when you are chasing them for payment of outstanding sales invoices.

In practice debtors may use many of these excuses, even if they are not true, to try and get more credit. The secret to effective credit control is to be as objective and through as possible in handling any excuse that you are given. For example, if a customer says "the cheque is in the post", don't just accept that and hand up - ask them to confirm the amount and the cheque number, when it was posted etc. That way, you may identify those that are fobbing you off (and take some comfort in cases where they appear to be telling the truth).

Handling Common Late Payment Excuses

These are some common payment excuses, together with possible responses:

Excuse Possible Response
Haven't received the invoice. Immediately email, fax or post a copy and follow up to confirm receipt and a payment date.
Awaiting our next cheque run. Confirm details to ensure it is included and the date for payment. Diarise for follow up either just before the payment to ensure its still included or if not received.
Will be paid shortly. Confirm an exact date and follow up accordingly.
Hasn't been passed to accounts yet. Ask them to deal with it immediately and ask for details of the accounts team to follow up with them direct.
Cheque is in the post. Ask for the date it was posted, confirm the amount and request the cheque number. You could even ask for a copy, but they may not keep them. Follow up if not received within the agreed timescale. You might like to suggest moving to electronic payments as an alternative, many can now be sent and received the same day, or within a few days, with no additional banking costs to your customer.
Signtory (or second signatory) isn't in. Find out when they will be and diarise to call back. If you are told that only one signatory has signed your cheque request a copy.
Invoice is disputed. Calling before the invoice is due can be helpful in preventing this being used as an excuse. If a dispute is mentioned, take details and try and get it resolved. Disputes could be caused by many things ranging from a minor discrepancy on an invoice to the wrong customer having been billed for an transaction, making the invoice invalid.
Changing my bank. Ask for proof. Ask when it will be resolved and diarise to follow up. This is very unlikely to cause any significant delay so is likely to be an excuse.
Ceased trading or in liquidation or receivership Ask for the date that they entered formal insolvency proceedings and the contact details of the insolvency practitioners (IP) that are dealing with their case. Call the IP immediately to lodge your claim. If you have a Retention of Title (ROT) clause in your terms or contract highlight that to the IP as you may be able to recover goods supplied, if they are identifiable. 
Cash flow problems or will pay when we are paid. This is potentially a serious problem. You may choose to move to issuing a final demand immediately or you may choose to follow up at an agreed time, depending upon your risk appetite. As a more innovative idea, you could refer your customer to an invoice finance company who will release money against your customer's unpaid invoices, improving their cash flow, enabling them to pay you.
We have paid it The simplest excuse for late payment, implying that you have missed receipt of the payment. Ask for the date, amount and method of payment - if it was an electronic payment check the sort code and account number they sent it too. Check your bank statements, preferably online. If you haven't had it go straight back to the debtor and follow up - asking to see evidence of the payment if possible.
Don't have you set up on the system This is the kind of delay that could be covered off in advance, before you supply the customer. You should try to understand their payment processes to save yourself delay later on. If this excuse is used, you need to provide the details required to "set you up" as soon as possible and you need to make sure you are speaking to the person that can deal with that process for you.
We only pay on statement If the customers says they only pay on receipt of a statement then send them one. If you need a template for a debtor statement of account we have one you can use.

    View our list of the: Funniest Late Payment Excuses.

    Return to the Credit Control Guide

    Share with:

     

     

    Examples of just a few of our finance partners:

    skipton
    acg
    marketinvoice
    investeccapitalsolutions
    funding invoice
    pulse cashflow finance