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The most outlandish excuses do the rounds when it comes to overdue invoices. The credit controllers among us could write a book about it. Here are our Top Ten Excuses.
1. “We have not received the invoice; can you resend it?”
The most frequently asked question, by far. Customers have “lost” the invoice. Dealing with this takes a lot of time. Therefore, first check with the debtor whether all contact details on the invoice are correct. If they are, try to find out the real reason why the customer is behind on payment.
Tip! Sending the invoice by e-mail – instead of by letter – can eliminate many problems in advance, because in most cases you will know that the e-mail has arrived and/or has been opened.
As a next step, resend the invoice with a payment reminder, and check whether everything has arrived correctly this time. We recommend making a phone call. This way you are 100 per cent sure that the customer has received the invoice and there are no further queries about it.
Provide a hyperlink to the invoice with the payment reminder, so that the customer is one click away from all the necessary information. With iController, this is a standard function.
2. “I am not satisfied with the product or service provided”
This can always happen but should actually already be resolved before an invoice is classified as “overdue”. It is therefore best to build in a number of checks in the sales process to prevent this.
For example, ask why the product or service does not meet expectations. With a bit of luck you can solve it that way.
Another possible solution is to involve Sales in the dispute. In iController this can be done very clearly via the “dispute management tool”.
3. “The person responsible is currently unavailable”
The person making the payments cannot be reached or is absent due to illness or vacation.
If you keep missing the person responsible, you can try calling back at other times, for example before 9 o’clock in the morning or after 5 o’clock in the afternoon. If that doesn’t work, arrange a specific time when you can contact the relevant person.
The reason that a payment cannot go through is not because a specific person is absent for a few weeks. Ask if someone else within your customer’s company is authorised to make the payment. Or ask what procedure is available for other urgent payments such as wages.
4. “I thought we still had time to pay”
If your contracts or terms and conditions do not clearly state a payment term, you open the way to abuse. If you have stated a clear payment term in the contract or in your general terms and conditions, then refer to it explicitly.
Tip! Place the payment term on every document that matters: in the quotation, on the order confirmation and on the (open) invoice itself.
5. “We have just paid. It’s all on its way”
If this happens, simply ask for the bank details, and check once again that the customer has noted them accurately.
6. “There is an error on the invoice”
This can certainly be a valid reason, but it is also a way to delay an immediate payment.
Try to find out where the error is. Go through all the data with the customer to check that it is accurate. When re-sending, ask the customer once again to confirm that all the data is correct.
7. “My customers haven’t paid me yet”
Debtors sometimes feel that they have the right not to pay your invoice, because, for example, they have not yet received payment from their own customers.
If this is the case, the customer should have told you so before concluding the sales contract. By signing the contract, to which payment conditions are attached, the customer is obliged to make payment. And to do so within the agreed term.
An interim solution might be to allow the customer to make a partial payment, while agreeing on a date by which the outstanding amount must be settled.
8. “Our systems are down”
Immediately ask your customer about the seriousness of the situation. Is it a very temporary outage, or should you assume a longer period?
If the latter is the case, ask the customer to proceed with the payment manually. Make sure that your customer receives all the necessary information, so that the payment is then successful.
9. “I have a cashflow problem”
This is a difficult one because it immediately implies that it’s uncertain whether you will be paid. In this case, you must first identify the real reasons why a payment cannot be made. Run a credit check and, if possible, get the company’s financials. You can also explicitly ask the customer for the underlying reasons.
10. “We will not pay the invoice”
If the customer comes out with this, there are probably other issues involved. The customer may not be satisfied with the services or products provided. In such disputes, it is better to hear from the customer what the expectations are, and if there is no other option, call in external help to get out of the impasse.
Sounds familiar?
These are ten common excuses that customers invoke to postpone the payment of an outstanding invoice. Maybe you can add a few others from your own experience?
Hopefully we would be able to give you some extra tips to find a solution the next time you have to deal with an outstanding invoice.
In any case, it pays to work out a sophisticated debtor policy in advance. One of the components of such a policy is risk management. With iController’s advanced risk management module, you can access commercial data and information from credit insurance companies, so that you can consult each customer’s risk profile at any time.
This reduces the risk of delays in the payment of invoices.
