Lame excuses for late payment revealed by Lovetts
‘The invoice has been lost’, ‘the cheque’s in the post’, ‘accounts payable are out to lunch’, are some of the most common late payment excuses used to fob off businesses chasing payment for services, as revealed by Lovetts, the commercial debt recovery lawyers. A survey of 100 Lovetts customers found that when it comes to excuses, the same tried and tested lame excuses are being used as much today as they were 20 years ago, despite the advances in IT and electronic payment processes to issue, log and pay invoices.
Number one on the list of excuses is ‘payments are authorised on set days per month’, but worryingly, the second most commonly used excuse is ‘the invoice has been lost’. Invoice disputes come in third place whilst businesses chasing debts may find that the accounts department is out to lunch a lot, as this is the fourth most frequently used excuse.
Charles Wilson, CEO and Managing Director of Lovetts, comments, “Businesses face a string of tired excuses from late payers but they are not entirely powerless as there are some simple steps they can take to address issues such as the invoice being lost or disputes over the amount. The first step is to follow-up invoices with a phone call to confirm receipt and check there are no issues over the amount billed. The second is to ensure your invoice is at the top of the pile to be paid, by making it quite clear to customers that it will cost them more if they delay payment. Get this written into the terms and conditions of the contract.
“It’s understandable that businesses are afraid of damaging client and supplier relationships, but unpaid invoices put additional financial pressure on companies in a tough market – it creates a vicious circle that has led the late payment culture we have in the UK today. We advise firms to use their terms and conditions to make it clear that they expect to be paid on time and take steps to protect themselves from late payers and their excuses.”
LOVETTS REVEALS TOP LATE PAYMENT EXCUSES
1. Payments are authorised on set days per month
2. Lost invoice
3. Dispute over invoice amount
4. Accounts department busy/out to lunch
5. Authorised signatory on holiday
6. Cheque is in the post
7. Authorised signatory is off sick