Confident Cashflow

Late payments—nothing gets your cash flow more tangled than overdue invoices. You’ve provided your service or delivered the goods, but your payment is nowhere to be seen. It’s a problem many businesses face, and unfortunately, there are no shortage of excuses when it comes to delaying payments. Here’s the good news: You’re not alone in this.

But here’s what could be standing between you and the money you’re owed. Let’s break down some of the most common late payment excuses, what they really mean, and how you can respond to keep that cash flowing. Ready to take charge? Let’s dive in!

1. “We Haven’t Received the Invoice”

This classic excuse is often used to stall payment, especially if your client is avoiding paying on time. The reality? They may have misplaced the invoice, or it may have got buried in their inbox.

Here’s how you can respond:

• Send a friendly reminder: Always follow up a week before the payment due date. This way, you have a paper trail, and you’ll give your client a gentle nudge.
• Confirmation of receipt: Ask for acknowledgment of receipt when you send the invoice. A quick email or phone call confirming they’ve received it can save you the trouble later on.
• Offer an easy payment method: If your client’s invoice issues are ongoing, encourage them to switch to a direct debit system or an online payment portal. It eliminates the chance for emails or cheques to get lost.

2. “Your Cheque is in the Mail”

This old chestnut still pops up from time to time. In today’s digital age, it’s hard to believe this excuse. But sometimes, your client might be sending a cheque the slow way, and you’re left waiting.

So, what’s next?

• Proof of postage: Request a “remittance advice” or proof of postage from their finance team. You can also ask them to cancel the original cheque and send a new one via faster, trackable delivery.
• Consider digital payments: Don’t bite off more than you can chew relying on cheque. If they are still your client’s preferred payment method, it’s time to gently nudge them towards faster, more reliable options like direct debit or ACH payments.

3. “We Haven’t Been Paid By Our Clients Yet”

Ah, the dreaded cash flow excuse. This one often appears when a client is caught between paying you and waiting for their own customers to pay them.

Here’s why this doesn’t have to be a dead end:

• Negotiate partial payments: If they’re having genuine cash flow issues, ask if they can pay part of the invoice now and settle the rest when their own payment comes through.
• Full payment in advance: You may also want to consider implementing payment terms that request partial payments or full payment up front. This is particularly useful in industries where cash flow delays are frequent.

4. “The Person Who Authorises Payments is Out of the Office”

It’s common for companies to have one person responsible for paying invoices, and when they’re out of the office—well, there goes your payment.

What’s important is this:

• Know who the decision-makers are: Always make sure you have a backup contact for these situations. Confirm the name and contact details of a substitute person who can authorise payments in their absence.
• Get a timeline: If you don’t have a substitute, simply ask when they’ll be back in the office. Then, follow up on the promised date.
• Set clear expectations: For clients you deal with regularly, you might want to ask for the person responsible for payments and set up payment dates to avoid last-minute delays.

5. “There’s a Problem with Your Work”

This is a tough one to deal with—especially when it’s used as a stalling tactic. If the client claims dissatisfaction with your work, they may try to avoid paying until the issue is resolved.

Here’s how you can respond:

• Document everything: Make sure you have all project milestones documented and agreed upon. If there’s a problem, have your records (emails, contract agreements, etc.) ready to back you up.
• Set clear terms: Add a clause in your contracts that addresses complaints. For example, you could say, “Complaints must be made within 7 days of invoice receipt.” This prevents clients from using dissatisfaction as an excuse to delay payments.
• Work with them to resolve it: If they genuinely have a concern, offer to discuss and resolve the issue promptly. But be firm—agree on a clear payment timeline, even if you’re making adjustments.

Final Thoughts: Get Paid Without the Excuses

Late payments are part of the business landscape, but the good news is they don’t have to be a constant roadblock to your cash flow. By being proactive, setting clear payment terms, and responding effectively to excuses, you’ll be better positioned to get paid on time—and avoid future delays.

What could you be doing with that money?

If you’re ready to stop letting late payments impact your cash flow, it’s time to put some of these strategies into practice. Take charge, protect your bottom line, and keep those payments rolling in! Need more tips on managing cash flow or getting paid faster? Let’s talk! We’ve got your back.