Recovering late payments from B2B customers can be a hefty challenge. Discover the top 5 late payment excuses and how to respond to them effectively.
Unfortunately, some businesses make up excuses to explain away delays in settling invoices.
Luckily, the majority of these companies use similar reasons or excuses for falling behind on payments.
Anticipating the common reasons or excuses for late payments may help you develop some tactics to reach payment solutions with your customers.
1. The payment is on the way
Ask for proof of payment, the date payment was made, who approved payment, etc. If they have not made a payment, they won’t be able to answer your questions.
2. The person who signs the cheques is away
This is a common excuse around holidays. Find out what provision has been made to sign salary cheques and paying utility bills. Very often, a few signed cheques will have been left to settle important accounts. Put pressure on the person you are dealing with by stressing how important your account is, making them feel they will be going against the wishes of their boss by withholding payment.
3. We’ve lost /never received your invoice – can you send a copy?
Find out if this is the only reason for late payment and offer to fax a copy immediately. If they don’t agree to pay within a couple of days, they are, in effect, admitting that this is a delaying tactic.
4. The computer is down
Ask how often these problems occur and how long faults usually last. If this is a genuine problem, they ought to be willing to send a manual cheque.
5. We are waiting for payment from a large customer
Ask the name and the address of the debtor and when they expect payment.
Your debtor should be able to provide some form of credit with their bank on the security of
this debt. Suggest that they do this and find out how quickly they can arrange it.
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FAQs
“We haven't received your invoice”
Often, a client who is trying to delay payment will wait until payment is due before advising you that they didn't receive your invoice. Response: Send your client an email asking for confirmation of receipt of your invoice – for example, seven days after dispatch.
How do you respond to common late payment excuses? ›
“We haven't received your invoice”
Often, a client who is trying to delay payment will wait until payment is due before advising you that they didn't receive your invoice. Response: Send your client an email asking for confirmation of receipt of your invoice – for example, seven days after dispatch.
What is a good explanation for a late payment? ›
When explaining a delay in payment, honesty and transparency are key. Begin by acknowledging the missed deadline and express your commitment to resolving the situation. Clearly state the reason for the delay, whether it's a financial discrepancy, processing error, or unforeseen circ*mstances.
How to reply for late payment professionally? ›
Dear [Contact Name], I apologize that we have not yet been able to fill payment for invoice [Insert Invoice Number]. We are currently experiencing [cash flow issues, etc.] that are preventing us from being able to make payments in a timely manner.
What is a good reason for a late payment letter? ›
It helps if you can point to a specific circ*mstance, or if you can show a recent track record of on-time payments. Keep it short and sweet. You might consider writing a goodwill letter if you missed one or more payments due to a medical emergency, a divorce, job loss, or a natural disaster.
How do you convince a creditor to remove late payments? ›
Here are two of your most viable options to remove late payments from your credit report:
- Call Your Credit Card Issuer and Ask Them to Take the Late Payments Off Your Credit Report. ...
- Write a Goodwill Letter to the Creditor Explaining Why You Haven't Made Timely Payments.
Nine tips for tackling late payments
- Know your customers. Complete credit checks on new customers before agreeing credit terms and limits. ...
- Be clear about your payment terms. ...
- Avoid cheques. ...
- Invest in credit control. ...
- Make a courtesy call. ...
- Start chasing right away. ...
- Claim interest. ...
- Be flexible.
Dear [Name], This is a friendly reminder that we haven't received payment for invoice [Invoice Number]. The payment was due on [Due Date]. We're not aware of any outstanding issues or reasons for non-payment, so we would like to respectfully ask you to make payment as soon as possible.
How bad is one late payment? ›
Even a single late or missed payment may impact credit reports and credit scores. But the short answer is: late payments generally won't end up on your credit reports for at least 30 days after the date you miss the payment, although you may still incur late fees.
How do I apologize for a late payment note? ›
I am sorry to be so late with my payment, and hope that this has not caused you any great inconvenience. My hours at work were cut unexpectedly, leaving me short of money this week. I am just starting another job and will be able to pay on time in the future.
Answer: I am writing to issue a formal apology for the late payments in your salary. The delay is due to budget cuts that the government had made to our company. Unfortunately, the Human Financial Resources Department who handle the salary payments has been affected hard by this.
How do I write a late payment forgiveness letter? ›
How to write a goodwill letter
- Offer an apology and be as sincere as possible.
- Express your gratitude to the creditor for the services they have provided you.
- Make sure that you include the reason why you missed the payment.
- State your case as eloquently as possible.
In the letter, you typically:
- Explain the circ*mstances that led to the late payment or issue.
- Express remorse and your intention to pay on time going forward.
- Request that the creditor consider removing or adjusting the negative item.
How to Collect Overdue Payments from Clients and Maintain Good Relationships
- Avoid making mistakes when requesting overdue payment.
- Maintain open communication with customers.
- Prepare for the worst-case scenario.
- Use an intermediary for payment relationship management.
We are sorry that this payment is late. I assure you that this was an exceptional circ*mstance. We are committed to follow the payment schedule that we worked out. We are sorry for any inconvenience this may have caused.
How do you address a delay in payment? ›
- 5 Ways To Professionally (And Effectively) Ask For Late Payments. ...
- Send the First Reminder One Week Before the Payment Due Date. ...
- Second Payment Reminder: On the Due Date. ...
- Third Payment Reminder: One Week After the Due Date. ...
- Fourth Payment Reminder: Two Weeks After the Due Date.
