Dealing with late invoice payments can be a real headache for businesses both big and small.
While most clients, customers, suppliers etc aim to maintain a friendly and professional relationship by paying their invoices on time, a variety of excuses can sometimes cause delays.
Here are some of the top reasons often given when invoice payments are late and some tips for overcoming them and getting your money.
Excuse Number 1: Cash Flow Issues
The most common excuse for late payments is cash flow problems. They may claim that they simply don’t have the funds to settle their invoices. Tips:
- Suggest a payment plan to help the client break down the invoice into smaller, more manageable payments.
- Ensure that your payment terms are clearly outlined in your initial agreement, and communicate them clearly to the client.
- Perhaps offer a small discount for early payments to encourage prompt payments.
Excuse Number 2: Internal Approval Delays
Sometimes, businesses blame internal approval processes for late payments. Tips:
- Ensure you know who the decision-makers and approvers are within the client’s business. This can help streamline the approval process.
- Discuss and agree upon reasonable approval timelines during the contract negotiation phase.
- Divide large projects into milestones and request partial payments upon reaching each milestone. This can prevent all-or-nothing approval bottlenecks.
Excuse Number 3: Administrative Errors
Errors such as wrong billing details or incorrect payment information, can lead to late payments. Tips:
- Before sending invoices, double-check all billing information, including contact details and payment instructions.
- Provide several payment options (bank transfers, credit card, etc.) to make it easier for the client to pay.
- Consider setting up automated payment reminders and systems to reduce the likelihood of administrative errors.
While late invoice payments can be frustrating, understanding and countering the most common excuses can help businesses maintain healthy financial relationships with their clients.
By being proactive, communicative, and adaptable, businesses can help reduce the occurrence of late payments and ensure smoother financial operations. But if you are still struggling to get your invoices paid, please do get in touch as we are here to help.
Call us on 0800 009 6106 or email firstname.lastname@example.org