Sema Fongod of Invoicediscounting.uk.com pinpoints 6 excuses used by business to delay payment and how to handle them.
The Euro 2012 football tournament has kicked off and the London 2012 Olympic Games are not far away. One thing business owners may not be too excited about is the fact that they are bound to experience late invoice payments from customers.
Management and even clerical staff across the UK have already booked their holidays and taken several days off work to enjoy the summer events. With London set to welcome over 19000 athletes for the Olympic Games, the hype across the nation may cause SMEs to delay tactics in paying for invoices.
Imagine an invoice due on a day England is playing? You’re most likely not to receive payment in a timely manner. It’s important for businesses to be aware of the threat this busy summer could pose on their cashflow.
“My printer broke down” or “my dog ripped my assignment” are excuses occasionally tolerated at school. However, it seems that businesses conform to the lame justifications from clients who don’t pay up on time. Do not be one of them.
Common late payment excuses
Irrespective of your relationship with a client, you need to get paid for work done, don’t you? When chasing payment from invoices, you may across several flimsy excuses and white lies on a regular basis. Here are a few of them:
• “The invoice system is down”
This is a common tactic used in delaying invoice payment. Enquire on how regular the computer or machine breaks down and how long the faults generally last. Also consider requesting a manual cheque.
• “The director who signs invoices is away”
Most certainly, this is the #1 excuse, especially with the busy summer coming up. Though this may be a genuine reason for payment delay because several business owners would take time off work, it can be used as a whirling tactic. Find out if there aren’t any other management personnel who can sign the cheque on behalf of the director. Target early morning phone calls to put pressure on customers.
• “Really?…The cheque is in the post”
This is simple. Demand for cheque and postal details. You should be able to track the post and find out if it’s just another trick by the customer.
• “We’re in a cashflow crisis”
This may be understandable especially if they’re a regular customer. Consider extending the payment terms and document any revised payment plan agreed with the customer. This should also serve as a lesson. In the future, conduct a credit check especially on customers with large invoices to check on their financial credibility.
• “We await cash from a large customer”
This is an excuse used by larger companies to disregard small firms and delay payment by making them feel inferior compared to their similar-sized firms. Do not be intimidated. Request for the details of the large customer and when their invoices are due.
• “We seem to have lost your invoice”
Resend the invoice via mail, post or fax and get a confirmation letter. If they’re genuine, they’ll settle their invoice once they receive a copy.
Invoice finance solves all late payment issues
And the list of excuses continues… It could be quite frustrating as a business owner to let your efforts and investments go in vain due to a few customers who delay payment. Invoice finance is a facility that presents a solution to every possible excuse you could get from late-paying customers.
Rather than having to wait for payment, invoice finance lets you have the money when you want by advancing up to 95% of the payment due within 24 hours of submitting the invoice. You maintain your relationship with your customers and when they settle their bill, the remainder value of the invoice is paid to you.