How to overcome the 25 most common excuses for non-payment

Do you have to deal with nuisance excuses for non-payment?

Running your own business can be tough! Not only do you have to make sure the actual work that brings customers in through the door is done, you also have to take care of all the back office stuff that keeps the business running such as making sure your staff are paid properly, that your suppliers are happy, that your accounts are in order, updating social media and your website and making sure you are paid on time by your customers.

When your customers delay payment, and throw excuses at you, it can be difficult to know how to respond. Even a seasoned credit controller who might face excuses everyday can sometimes be caught out by a clever ruse.

Therefore here is the CPA guide to dealing with some of the most common delaying tactics and excuses for non-payment.

1) “I have not been paid by my customer yet”.

Debtors sometimes feel that they are entitled to withhold payment until their customers make payment to them.  Unless you agreed this kind of credit arrangement from the start then this is clearly not the case and a strong line needs to be taken. Ask the name and address of their debtor and the expected date of payment. Be sure to attempt to obtain all details of the debtor’s non-paying customer including telephone numbers and contact names. Having to provide these details is not something that the debtor will be keen to provide and it may be this is sufficient to tilt the balance in your favour. Debtors often have procedures in place to “pay when paid” as this simplifies their checks and balances procedures. A determined and insistent collector should be able to overcome this. If the person you normally speak to with regards payment of accounts doesn’t seem bothered ask to speak to the manager or the director of the company to highlight the issues you have discussed.  If however you are feeling extremely generous, you could offer flexible terms such as part-payment now with the balance on payment by his debtor or you could accept post-dated cheques to guarantee payment by a certain date.

2) “But I posted the cheque last week”

The cheque is in the post – The oldest and worse excuse in the book!  If you haven’t received the cheque, your client hasn’t paid you.  It is their responsibility to make sure the payment arrives. The post system does not lose nearly as many items of mail as debtors would have you believe. It is statistically unlikely it has been lost. Ask for proof of postage, or full details of when the cheque was posted, and whether it was sent by first or second-class mail. You could even ask for the cheque number. The more details you ask, the harder it is to bluff. If the debtor is telling the truth they will generally be willing to accept and answer your questions. If they are not, the excuse will probably not be used again because of the professionalism and through nature of your questioning.  Keep a record of the details and check them against the cheque when it does arrive. A variation of this ploy is for debtors to purposely post cheques either unsigned or with either an incomplete or incorrect address to purposely delay its arrival.  Feel free to ask them to cancel the cheque and arrange payment by some other more reliable means such as bank transfer.

3) “Our director is not here to sign the cheque today”.

This excuse is often used during the summer months and over the Christmas and holiday periods. As in judo, such excuses given by debtors can be turned against them and used to your advantage. Ask them what arrangements have been made for paying salaries and other essential items (such as your invoices). There are often a number of “pre signed” cheques which have been left for emergencies. Then, convincing your debtor that your account is essential and can be regarded as an emergency should be a simple matter for any reasonably skilled collector.  A variation of this can be when they need two signatories and say “The cheque is ready but waiting for a second cheque signatory”.  In that case push the debtor hard to forward the cheque with the single signature to you. Ask them to follow this up with a request to their bank to clear the cheque upon presentation to the bank. Always ask for copies of both the posted cheque and the request to the bank for clearance.

To see all 25 excuses, please access our handy pdf by following this link to http://how-many-excuses.cpa.co.uk/

Conclusion

Companies have a legal obligation to meet their debts when they fall due. If they cannot they are technically trading whilst insolvent.  However late payment is a common problem for all businesses.

You do not have to handle all these excuses yourself. You can instruct an established debt collection professional who will assist you with the hassle of slow payers and their excuses.

You might be hesitant about contacting a debt collection agency. What are they going to be like? Can they help your particular type of business? There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike. Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

Please call us on 0330 053 9263 to discuss your debt collection requirements in total confidence. Alternatively, either email us or use our contact form.

James Salmon

Director

27th September 2017

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