How to Deal With Late Payment Excuses in Small Business: Proven Tips?

“Oh! My card isn’t working.”

“Unfortunately, I missed the invoice.”

“I’m not satisfied with your work.”

These are some of the familiar reasons that emerge from a client’s side as reasons for late payments.

Are you a small business owner looking forward to early payments? What encourages you to plan your business effectively, and what puts you down?

Delays in payments put you down and lead to negative cash flow for the business. As a result of negative cash flow, the productivity of the business will go down, the business will face debt, the expanding process of the business will slow down, and sometimes you will not be able to reinvest.

So, it is crucial to circumvent late payments in a business. Continue reading this blog and sense about late payment excuses.

Some of the Top Late Payment Excuses and Tips to Overcome Them:

1. Invalid Invoice Details:

For eschewing the invoice payment, some customers may say that the details that you have provided in the invoice are inaccurate.

To overcome this issue, you should double-check the invoice before directing it to the client. If there are any mistakes in the invoice, modify the invoice with the new due date and accurate details. For confirmation, make a call or contact the client via email or text message and make certain that the details are correct.

Using the invoice software for small businesses, the business owner can create an errorless invoice for the welfare of both the business and the client.

2. Facing Payment Issues:

The foremost reason on the client’s side for late payment is the invoice payment issues. Some of the common statements made by the clients regarding payment issues are “the bank server is down”, “my card is not working”, “I’m out of station and there is no network here”, and “some issues in my bank account”.

Believing all these reasons is not advisable for business owners. If a client puts forward these reasons for late payment, first discuss with your client and confirm whether the reason is verifiable or not. If the issues are verifiable, extend the due dates.

If the issues are non-verifiable, try to handle the situation politely by explaining your situation.

3. Not Satisfied with the Services:

If the customer is not satisfied with the products and services they acquired, they used to deny the payment. “Why should I pay for this unsatisfactory work?” is the usual question that ensues in the client’s mind in this situation.

An effective measure to solve this issue is that you should gather feedback from the client once they receive the product. Once you gather the feedback, productive steps should be taken to rectify the problem.

As a result, the client feels happy and satisfied, and it improves trustworthiness towards your business.

4. Emergency Situations:

Every human being in this world faces an emergency in some situation. While paying the invoices also, the clients may say that they are in an emergency and cannot proceed with the payment now.

Some excuse statements used for emergencies are “I am in the hospital” and “I spent all the money in the medical emergency of my father.” In this situation, the business owner cannot judge the client whether they are telling the truth or lying.

To sort out this issue, first confirm the reason given by the client. Give them enough time to recover from their emergency situation. Contact them after a few days, ask about their health, and enquire when they can complete the payment. When they again extend the time, again make contact with them.

5. Transferring the Bank Account:

Some clients may transfer the bank account from one bank to another bank. This process takes a certain period, during which their bank account, cards, and the corresponding payment platforms will be blocked.

The verification process for transferring the bank account takes a long time. So, when the client addresses this kind of issue, quietly listen to them and offer enough time to accomplish the payment. Also ask for authentication from the client regarding the transferring process.

6. Absence of Preferred Payment Platform:

Clients from disparate regions make use of diverse payment platforms. While delaying the payment, the major reason told by a client will be, “I am not using that payment platform.”

The small business invoicing software offers the feature of adding multiple payment platforms. Offering different payment platforms for your invoices encourages the clients to continue the business with the same brand. Also, accepting the payment from the client’s preferred mode adds a positive aspect for your business and encourages the client to make faster payments.

7. Forget to Send the Payment Reminders:

Some clients expect to receive payment reminders before the due time. Sometimes, the client may be on a hard-pressed schedule, so they may forget about the payment, which results in late payments.

To iron out this issue, you can make use of online business invoice software that sends automatic payment reminders on relevant dates. These payment reminders make the client aware regarding the invoice payment and help in avoiding late payments.

8. Cheque is in the Post:

Some clients make payments by cheque. They typically dispatch the cheques by post and may state the reason that the cheques are posted.

To overcome this issue, ask the client for the following details.

• Cheque number
• Posted Date
• Copy of Posted Cheque.

Ask for the above details as evidence and take effective measures accordingly.

You can also suggest some alternative methods, like using cards for payments and using different online payment modes instead of posting cheques.

9. Charging Penalties:

One of the rapid ways to collect late payment is penalty charges.

If the reasons suggested by the clients are non-acceptable by the business owner, they can put penalty charges for the client. This makes the client make an early payment on the succeeding purchase.

In late payments cases, the reasons may be satisfactory or unsatisfactory. It is in the hands of the business owner to analyze the reason properly and take effective measures.

Explore the points mentioned above, make use of invoicing software and streamline your payment process.