No matter how well run your credit department is, customers will always find a way to not pay on time. It is an unfortunate, yet inevitable, part of extending credit. Switching credit terms and constantly evaluating your customers can help minimize this, but at the end of the day, you will still have customers to deal with.

Create Your List

Many customers love to give countless excuses for not paying. We have listed out some of the most popular reasons that a customer will give for not paying on time. We suggest making a list like this of your own with some of ours and possibly others that you have heard over the years. Whenever you encounter a late paying customer, use this list to help you find out why you are not being paid. Start by crossing out any reason that you know could not possibly be true until you are left with only a few possibilities. From there, it is a matter of talking to your customer and doing some research to figure out the real reason your customer is late paying their bill. It is important to never let the customer control the conversation with their excuses. By doing this, you will always be one step ahead and make it harder for them to lie their way into a better deal.

Popular Reasons For Late Payment

• The quality of the goods/service that you gave them was below the agreed upon standard
• They have been having late payment issues of their own
• They simply do not have the money on hand. (never believe this, most businesses will have the money to cover at least some of their debts. Make sure yours is the most important)
• They want to make you wait in order to get you to agree to a better deal somewhere down the line.
• You never asked/reminded them a payment is due. Never assume that someone is going to pay you just because you send them an invoice. A friendly, yet stern, a reminder can go a long way.
• This customer just has a habit of paying late.
• They believe they have already paid you what they owe you. This is normally easy to disprove (check numbers, bank statements, etc.) but sometimes customers will use this as a tactic to argue that agreed upon price is too high.
• Random excuses that will vary from customer to customer. They may say a key member of the team was on vacation or sick for an extended period of time or that a large capital purchase tied up their liquid assets for a period. Some of these may be very legitimate, but others are just all smoke and mirrors. Normally, if you press them on the topic the lies will fall apart rather quickly.

The key to getting paid is to always have control of the dialogue between you and your customer. If you can go into a conversation with a good idea as to why your customer is late on a payment, you will be able to see through their excuses and get paid sooner.