Common excuses for late payment and how to contest them

As a business, you always should be paid for any product or service you provide. Unfortunately, you’re likely to encounter people or companies who refuse to pay you or give excuses as to why payment is late.

To help you deal with this tough situation, we’ve provided a list of the most excuses and how to contest them. There are hundreds of different excuses you might hear over your business career, but some of the more common ones are:

• I can’t pay you until I get paid
• The cheque is in the post
• The boss isn’t here
• We didn’t get an invoice from you

Although we’ll be providing specific advice to deal with each excuse, it’s a smart idea to keep a generic late payment reminder template on hand to send to customers, too. Some clients may have simply forgotten to send payments, so these reminders serve as a good way to approach clients when you’re trying to find out why you’ve not received payment.

This sort of excuse is common if your customers are businesses themselves – an example would be if you sell building materials, but the builders won’t pay you for the materials until they receive payment for their work.

This excuse is easy to deflect because unless you agreed to this sort of arrangement when you sold the goods, you are due payment based on the legal rights that any business has. These rights include things like the right to contest unfair contracts, the right to a refund for unsuitable goods, and the right to be paid for goods and services.

If the client does not pay after you’ve explained your rights, request the contact details of the company they claim they are awaiting payment from. In some cases, this request alone will tilt the balance in your favour, but if not you should discuss the issue with the other company to try to move things along.

This is a very old excuse, and is unlikely to see much use in the modern business world where bank transfers and card payments are far more common.

The best defence against this excuse is simply to get as much information as possible. For starters, you should ask for every piece of information from the list below:

• Proof of postage
• The address the cheque was sent to
• The value of the cheque
• If the cheque was sent via 1st or 2nd class post
• The cheque serial number

If the customer cannot provide all this information, they may be bluffing and might not have sent payment. Even if they can provide all the information, if an unreasonable amount of time passes, you can ask the customer to contact their bank and cancel the cheque. Once the bank cancels the cheque, request that the customer pays you through an alternative method. 

There are many alternatives to paying by cheque, and most of them are much faster. It’s a good idea to offer to take payments via Paypal, mobile bank transfer, or debit/credit card as well as by cheque. You should list the options you offer for taking payments on your invoice so that they are clearly visible to customers.

This excuse is common amongst clients who are small businesses themselves, and is hard to contest without being pushy. Sometimes, it will be given by someone who isn’t being difficult, but simply doesn’t understand that payment is possible even without their manager present.

The two main weaknesses of this excuse are that even without managers being present, a business will continue to run and (more relevantly) continue to pay its employees. If they’re getting paid, so should you.

If they stand by the excuse and still refuse to pay, you should ask if there is anyone else within the organisation that is able to authorise or send payments, such as a financial manager. Failing that, ask for them to contact their boss immediately to authorise payment – in this modern era, even someone who’s on holiday will likely have their phone on them. 

Unfortunately, you might get this excuse even if you know for a fact that you’ve sent an invoice. Luckily, it’s easy to contest this. It doesn’t matter when a customer receives an invoice, it matters when they receive the product. Legally, you’re due payment 30 days after the customer received your goods, even if your invoice was not received. 

If you don’t want to come off as too aggressive, you can always ask the client to confirm their contact details to make sure you sent the invoice to the correct place. If you get this excuse often, start contacting clients a day or two after sending an invoice to make sure the client has received it. 

A common variant of this excuse is that they did receive your invoice, but there was a mistake. With the many instant messaging options available to you – everything from email to Whatsapp – you should be able to very quickly fix the invoice mistake, send a corrected version, and then request immediate payment. 

If another company or client challenges you about leaving something unpaid or not sending an invoice, you need to be sure that you have proof to back up any claim. An excellent way to ensure this is by using a software tool to manage your finances, such as Countingup. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.