At the very end of the month, you check the records and see that many invoices are still pending and the list of justifications from clients for not paying on time. It’s a common situation that one encounters as an entrepreneur, freelancer, and business owner at some point in life however no business likes to hear excuses when it comes to payment for their on-time services.
You may also encounter late payment excuses such as, we forgot to make the payment, we didn’t receive the invoice, and more. Though it is okay to accept excuses sometimes, if you do so frequently, it will harm your business.
You may often deal with many late payment excuses and if you hesitate to talk about money with your clients, in this article we will cover the most common excuses clients make for their delays in payment and the practical ideas to tackle the situation professionally.
Top Late Payment Excuses Unveiled and How to Handle Them
Here are some of the most frequent late payment excuses and how to tackle them:-
1. We didn’t remember to make payments:
This is one of the most common excuses customers make, and most of the payments get delayed. In this case, it is important for both parties involved to send payment reminders to ensure that payments are made on time. Additionally, implementing a consistent payment schedule or enabling recurring payment choices could also be effective in dealing with this issue.
2. Already paid the invoices:
Sometimes customers say that they already paid the invoice. In this case, first, check the invoice because there can be an error in data entry, or maybe you forgot to make their entry. This kind of excuse can be acceptable if it is not often. If that is the case, there are many tools available out there that can help you track every activity of the invoice. Billbooks is one such accounting tool you can use to track invoices accurately.
3. A family emergency has come up:
It’s a trick that customers can play on you that the individual who makes the payment is out of the office for some family emergency. Find out and make sure that someone else comes to fill the position because it is very impractical that until the person comes back the firm goes on hold. In that scenario, there is no option other than waiting. Make sure when they will pay and ask them for the payment if they still have not paid by the given date.
4. Cash flow issues:
Sometimes customers may make excuses like they are having cash flow issues and that’s why they are delaying payment. Then ask them when they will be able to pay you or you can ask them to pay the amount they can manage right now. Also, ask them when they will pay the due amount.
5. We didn’t receive the goods yet:
There can be an excuse like they haven’t received the goods yet or maybe it is true. There what you can do is if the client is claiming they haven’t received the goods yet, you can share the signed delivery papers through online documents management. There are many software available in the market that help you keep the records.
6. We haven’t received the invoice:
To avoid such excuses always send an invoice via email and if still they are making the same excuse in that case make sure that you sent the invoice to the right email address if the mail is right then it is clear that they are making an excuse.
7. Switching to a new bank:
One of the common excuses clients make is that they are switching to a new bank but this is not a big deal for any business because it takes only a few days. If they are taking longer than a week then they are making an excuse. The only thing you can do is ask for the proof and still switching a bank doesn’t take longer than a week.
8. We went bankrupt:
There is a possibility that they went bankrupt but still confirm that they are not spreading false information, you can contact the officials that the bankrupt firm owes you money.
9. We are working on a new project:
Your client may be out of money while they are working on a new project but before accepting these ask for proof and make sure you will get paid as soon as they have enough money to pay your debt.
10. We have already sent you a check:
The Customer may inform us that they already paid the amount. If this is the case, Check with your bank and ensure you received the payment. Every business may encounter this problem, so it’s important to verify all the information in your records before requesting payment from the customer.
How can late payment excuses affect your business?
Late payment excuses not only affect the financial growth of your business but also impact your relationship and reputation within the industry. Here are some late payment excuses that have several effects on your business.
- Late payment excuses can wear down trust with clients or customers. Frequent excuses show the lack of reliability and commitment issue.
- It disrupts cash flow and a good cash flow is important for other expenses such as salaries, bills, and other expenses.
- It hampers your productivity because dealing with excuses is very time-consuming and demands your effort which lowers productivity.
- It also has an impact on your brand reputation because your late payment reports can break the trust of stakeholders and affect your reputation.
- Late payment excuses can impact the stability and growth prospects of the overall business.
But you do not need to worry anymore, Try BillBooks. It’s one of the most popular invoicing software options available. You can easily create and organize invoices with special features. Additionally, you can set automatic reminders for upcoming and overdue payments. These reminders can be scheduled to be sent at specific intervals, say a few days before the due date and on the due date.
Sarah is a freelance choreographer using Billbooks for her business says “BillBooks is a gamechanger for my freelance work. Late payments are no longer a headache as the automatic reminders feature has effectively addressed the issue. It has taken away the frustration of continuous follow-up for payments and clients. Also, the software creates invoices quickly and effortlessly.”
How to Address Late Payment Issues Professionally?
It is necessary to maintain a polite yet firm tone when it comes to responding to late payments professionally. By acknowledging and understanding the issues the client may be facing you can show empathy towards them. Try saying “I hope you are doing well, I wanted to draw your attention to that we haven’t received the payment from your end.”
You can also tell them the consequences you are facing because of late payments such as how it has an impact on your cash flow and operations and you would be grateful if you get paid.
By using firm language and maintaining professionalism you will not only encourage a cooperative approach to resolving the issue but also strengthen the bond with your clients. That will have a positive impact on your business and will help you grow promptly.
Conclusion:
To maintain a better cash flow, productivity, and good customer relationships it is essential to effectively manage late payment excuses. By communicating and understanding the reason behind the delays and implementing strategies you can manage the financial risks of your business because it is necessary to communicate clearly, and maintain transparency to minimize misunderstanding. Talk professionally, take follow-ups, and give flexible payment options. This will not only strengthen your financial stability but also foster your relationship with your client.
FAQs:
Q. How to explain delays?
Always be honest and transparent because it is the key to maintaining any relationship whether it is a personal or business relationship. Put your point directly by telling them your reason for the delay whether you lack money, processing error, or any other issues you face just be honest.
Q. How to ask for money?
There is some hesitation in asking for money, whether it is personal or professional. It requires honesty when asking for money. Communicate your needs such as financial issues, some family issues, medical bills, car repairs, and more.
Q. What to do when approval is pending from higher authorities?
Pre-approval helps you with timely payments and you have clarity of payment like after how many days you will receive future payments.
Q. What should be done if late payments are turned into personal issues?
If late payments are becoming personal issues, you can consider offering an alternative payment schedule or method to help them meet their obligations without jeopardizing your financial stability.
Q. How to handle disputes over invoices of delayed payment?
Communicate and address your concerns by providing documents transparently and honestly to resolve the issue by clearly discussing the steps needed to make payments.
Q. What to do if we face delays due to the internal approval process at the client’s end?
Ask for the contact details of the person responsible for approvals and follow up with them directly.
