You have supplied goods or services to your customer and rendered an invoice, now you just need to wait for the payment to come in. But what if your invoice is not paid in accordance with your payment terms and is now overdue for payment?
It is important at the point the invoice falls overdue to ascertain if there is a dispute or if your customer appears to be using delaying tactics to extend payment terms or more worryingly, a sign your customer is in financial distress.
Here are some common excuses for non-payment of invoices and what you should do:-
I did not receive a copy of the invoice.
It is always a good idea to check with your customer once the invoice has been sent to confirm it has been received by the correct department/person. Always keep notes when you make these calls to include details of who you spoke to and if they confirmed receipt.
The invoice has been paid.
Always request further information on how the payment was made and evidence of the payment clearing their account – not just evidence of a pending payment that they can later cancel.
Our terms are 60, 90,120 days
It is usual that the supplier’s Terms of Business would be the Terms that govern the relationship which would include payment terms. You would need to review the Terms to see when and how they were accepted and if any variations were discussed/agreed.
I cannot pay you until my customer/s have paid me.
The reality is you are not a bank and this could jeopardise your own business as it will impact your cash flow. The circumstances are so broad here, you could agree an extension to pay or agree to accept instalments or escalate to a debt collection company and send a Letter Before Action (a formal demand for payment). If you have a third party that you escalate cases to in the event of non-payment it is always wise to chat through the background with them for some free impartial advice. If you do not currently use a third party, we offer free, no obligations consultations so pick up the phone and we can advise you.
Our customer has said it is in administration/liquidation.
You should request evidence and details of the insolvency practitioner. You or your debt recovery provider can then make contact to clarify the position yourself and how far along the process your customer is – if they are at all.
These are just a few of the reasons for non-payment you may come across. It is important, particularly in the current climate to review all accounts as they fall overdue to ascertain if your customer is just delaying payment, has a valid dispute or at risk of becoming insolvent.
Early intervention and escalation remains the key to achieving the best possible recovery rates.
If you have overdue invoices and want to discuss your options, please do get in touch with us for a free, no obligation telephone call.
Rachel Rowbotham (Operations Director): email@example.com
Penny Daisley – firstname.lastname@example.org
Legal recoveries & Collections Ltd
www.legalrecoveries.com | E: email@example.com | Tel: 0330024 6343