Why Is My Business Suffering From Late Payments?

Why Is My Business Suffering From Late Payments

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“Why is my business suffering from late payments?” is a question that you are probably asking yourself more often as the result of the current economic crisis. Businesses are suffering from a late payment pandemic, as well as from the coronavirus pandemic, and it could be down to a number of different factors. We have spoken before about the rise of late payments for British businesses and how to protect your business from this widespread issue. We’ve also given you advice on how to choose the right payment terms for your business, which can help in eliminating some late payments, but have you taken a look at your clients and tried to decipher why you are consistently receiving late payments from some of them?

When clients don’t pay their invoices on time, it can cause a major knock-on effect for your cash flow and plunge your business into a spiral of late payments, both being made to your business and by your business so it is critical to determine the cause of the delayed payment and reach a resolution quickly.

 

My Client Is In Financial Difficulty:

It is becoming increasingly common for businesses to find themselves in financial difficulty, some due to the effects of various lockdowns and measures introduced by the government to try and curb the spread of COVID-19. As a result of reduced income, particularly in hospitality and retail industries who are being hit hard by the effects of lockdown, some of your clients just simply will not be able to pay for your services. In these situations, a certain level of understanding needs to be applied and the best course of action may be to extend your payment terms if you (and your client) are confident that their financial situation will improve.

 

My Client Is Disputing The Invoice:

Some clients may have an issue with the invoice that you have submitted to them, which will result in a lengthy payment process. Sometimes it’s as simple as a missing PO number, or incorrect address on the invoice but sometimes the dispute is more complex. Your clients may disagree with the price on the invoice, or perhaps disagree that the work has been completed, or even carried out at all. These disputes can be difficult to resolve and so it is key to address these problems as soon as they arrive. If you can provide evidence that work has been completed or written proof of acceptance of a quote then you will be in a much stronger position to resolve the dispute quickly and amicably. 

 

My Client Is Refusing To Pay:

Unfortunately, across all industries, you will come across clients throughout the lifetime of your business who never intended to pay you at all. They will ignore your attempts to communicate with them and not make any effort to clear the outstanding invoice. This is a particularly frustrating situation to be in and can have a detrimental effect on the business’s cash flow. It is vital that you act quickly to try and resolve these situations as soon as they arise. But it can be difficult to commit the time and effort that is necessary to recover debts if you don’t have the right resources in-house. In this situation, we would recommend that you engage with a commercial debt recovery agency.

 

If you are finding yourself in a situation where you need the aid of a corporate debt collection agency as a result of an escalating number of late payments, it is important to find an expert organisation who have a proven track record in recovering debts. Our team will work quickly and efficiently to discover all of the necessary facts about your case and have an open and honest discussion with you regarding the most effective method for recovering your debt at this time. The team will then communicate with your debtor in a professional manner, keeping you up to date throughout the process and resolve the issue in a positive manner for all involved. Call us today: 0800 009 6106

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