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Home page News News and information "The cheque is in the post" Ten of the most common excuses for late payment and how to deal with them

"The cheque is in the post" Ten of the most common excuses for late payment and how to deal with them

These 10 common late payment excuses have been contributed by Coface. Specialists in credit management solutions.

"I have not been paid by my customer yet".

Debtors feel that they are entitled to withhold payment until such time as their customers make payment to them.  Clearly this is 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 debtors 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.

"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. The arguments given by debtors can be used to your advantage. Find out what arrangements have been made for paying salary 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.

"I have not received copy invoices /  statement of account".

Have the debtor confirm to your that this is the only reason for withholding payment then, use a "closed" question, have them confirm that receipt of the copy invoice / statement will result in payment today. A copy of the invoice is easily forwarded to a debtor company and images can be scanned and stored for electronic transfer via email.
If the debtor is not prepared to make any agreement once invoices are received then this is often a sign that the excuse is a simple delaying tactic and a firmer hand needs to be taken.

"We didn't get the goods".

Today's technology makes it possible to store invoices, proofs of delivery and other types of documents in secure electric archiving environments. Documents are often capable of being retrieved at a moments notice and can be forwarded easily to debtors using email.
Ensure that the debtor provides you with a commitment to make payment immediately upon receiving the relevant documents (often the debtor company thinks the request for copies will buy them a week or two in further non payment time). Ensure the documents are provided quickly and further follow up calls are made quickly to ensure that the debtor company is keeping to their part of the bargain ie making payment.

"I am waiting for my new cheque book to come through".

Any decent bank will be able to make payment via alternative methods. Push for a CHAPS or BACS payment. A transfer from one bank to another is often the quickest method of making payment and flushes out those deliberate non paying debtors quickly. Be prepared to take action if the offer to make payment by alternative method other that cheque is refused.

"I am changing my bank account".

Ask for proof of the situation and permission to speak to the bank concerned. Point out to the debtor that their stance is unacceptable and that the costs of supporting the debtors non payment (ie interest charges and late payment fees) could be passed onto them if full and immediate settlement is not made. Again, push for payment either electronically or by way of a personal directors/shareholders cheque.

"I cant pay the bill".

This is where good collectors earns their wages. Be prepared to continue to press hard for full payment. If it becomes obvious that this is not working DO NOT switch immediately to instalments. Enquire first of all when the account may be able to be settled. The debtor often claims to be able to make full settlement within "a week or so". Now enquire "how much of the outstanding sum they are short of paying". Ask for the difference in the sums to be paid immediately with the "shortfall" to be settled by the previously agreed "week or so" date. Result.... payment in two sums as opposed to small instalments and settled over a relatively short time frame.

"The signatory is deceased".

Not much that can be done immediately with this one. There is often a good deal of paperwork to be completed prior to the release of any funds. Verification of the debtors position is however essential. A sympathetic, polite and yet firm approach is required. Who, what, when and where is the order of the day. Who is dealing with affairs? What is their contact details? When is it likely a payment will be made?. Always ask for details and follow up thoroughly with appointed parties.

"The cheque is ready but waiting for a second cheque signatory".

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.

 

"My accounts clerk only comes in once a week, on a Wednesday, from 6.00am to 9.00am".

If it sounds implausible then it often is. Be prepared to challenge to situation and the relevance or importance of this person in the payment process.  A company owner or partner should be perfectly able to forward payment and tie up the loose ends when the accounts clerk finally makes appearance in the office.

 
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