What To Do When An Invoice Is Late

What To Do When An Invoice Is Late

What To Do When Payments Are Late

There are many justifications and explanations made for late invoice payments. You may see some examples of these when you view the directory under payment ratings.

The account was overly busy

The account clerk only arrives one time each week

No money for bill payment

The terms of payment have changed

The check has been mailed out

Switching bank accounts at the moment

The client is making attempts to renegotiate contract payment terms

Invoice error

I can’t raise cheques manually

I am unable to pay

I am disputing the payment

My customer hasn’t paid me yet

Disputing invoices after agreed contract

Disputing invoices with no contracts signed

Did not receive invoices

Lost invoices

There was no quoted PO

There was no one for cheque signing

The director is unable to sign today’s cheques.

The term is a certain XX number of days.

Payments have been made to a different account/company

Payments are paid on dates set

Responsible person for payments has left the corporation

There is a ready cheque but second signatory for cheque is pending

Down computer

Deceased signatory

Awaiting a new book of cheques

Goods didn’t arrive

Next payments run is the following month

We only pay upon original invoice receipt

The account was overly busy

As part of agreeing to the terms of invoice, your client and yourself need to decide to whom to send the invoice to. Get the person’s name and their email address and telephone number. Do not use one that sounds generic such as Account at Client.UK.

Get the direct invoice dealer’s name and focus generating payments promptly from this person. If anything comes up, you will know whom to talk to each time. This prevents you from being passed around from post to pillar in the department of accounting and will help save tons of time.

The account clerk only arrives one time each week

Be sure to find out what day the accounting clerk comes in. Also, find out what day the payment day is due by checking the directory for Prompt Payments. Find out if there are any special circumstances that could change in the future. This will help get the payments made since you can time payments to when the account clerk comes in.

No money for bill payment

Once you see that the reason payment has not been made was a lack of money, the next thing for you to do is to find a major credit agency and obtain a credit report. Get an updated copy for final accounts and dates for the company you plan to do businesses with. Once you decide to proceed, split the payment into part arrears and part advances with as much advance taken as possible. To complete your work, you might have to bear costs. If this is the case, ask for advance payments to cover material costs.

The terms of payment have changed

Before you agree to move forward with your client, or before signing contracts, check the terms of payment of your customer. If they are different from your, pre-agree on the terms of payment on paper and ensure that it is stipulated in the contract that pre-agreed terms of payment will be valid for the contract’s duration.

The check has been mailed out

Check your potential client for payment ratings that show late payments. If the reason given is that the check has been mailed out, found out if payments can be made by BACS. With every invoice, ensure that the details of the bank account are included. This makes BACS payments very easy. Keep in mind that explanations such as this one is sometimes used as a tactic for delay.

Switching bank accounts at the moment

For most companies, changing bank accounts is a complicated process. Thus, it is unlikely that it often happens to the same company. Check if this has ever been a company’s reason or explanation for delayed payments in the past. If so, find out if the process of changing banks has been completed before you sign the contract.

The client is making attempts to renegotiate contract payment terms

When you see that the company has used this explanation in the past with suppliers, make sure you have pre-agreed on the terms of payment before you do business with the same company. Confirm this in writing by the CFO. It is always better to agree in writing when it comes to payment terms.

Invoice Error

When you see that there is an error on the invoice, make the necessary corrections as soon as you can before sending the invoice off to the client for payment. Accuracy in all matters is necessary for every smooth business transaction.

I can’t raise cheques manually

At times, this is the given explanation in order to devolve responsibilities of payment to someone else. Make sure you know exactly who has the responsibility for making invoice payments so that cheques can be paid.

I am unable to pay

When a client is not able to pay, this means they either won’t pay for one reason or another, or they lack the funding and simply cannot pay. No matter what the reason is, carefully obtain a report for credit rating and get a copy their most updated accounts.

I am disputing the payment

Find out what the explanation is for your client disputing the payments. Also, find out what resolution process is being applied for the dispute. When you finally refer disputes to the Small Business Commissioner of the Government, you will be asked the question what measure was taken for dispute resolution.

My customer hasn’t paid me yet

This might be true. Many non-paid invoices really are a result of this reason, according to research. If this reason was given by your client, then the business you are dealing with may not be the usual “late payer.” On the other hand, if you are part of a long supply chain, it might be a good idea to establish a system in which your client pays you directly and not when their customer pays them. This way, you won’t be held up by the chain of supply. Find out what the client’s system is when their invoices are not paid in time, to inform yourself about the process even further.

Disputing invoices after agreed contract

Each dispute has two sides of the story. An element of contractual obligation may be the reason for this particular dispute. You don’t want to tarnish a new relationship in business by raising contractual dispute possibilities if this is a very high value job. The process of agreeing on dispute on the contracts needs to be part of the initial agreements. Structure contracts in such a way that any invoice does not remain unpaid in case your service and goods are not delivered due to a third party’s action or inaction if the third party is not part of your own business costs.

Disputing invoices with no contracts signed

A contract should be signed each time you do business with a new company.

Did not receive invoices

Often, this is a tactic used to delay the payment process. Raise a red flag when you see this explanation cited. It helps to do invoicing through e-mail. However, even if you send soft copies of your invoices, follow this up with another email or a phone call by replying to older conversations of email. Send invoices to the actual person’s email address and not to a generic department for email accounts.

Lost invoices

Just like the explanation that the invoices have not been received, a lost invoice is also a tactic for delay in many cases. Make sure you address invoices correctly and send it by email when you can. Before you begin work, ask clients if they will accept emailed invoices. This is a good solution to the lost invoices issue. Both clients and suppliers increase transparency between them. Also, any given invoice can be seen anytime by either party.

There was no quoted PO

A PO, also known as a Purchase Order, is the way many larger corporations operate. A new project can sometimes begin with haste and no PO would have been supplied. In these cases:

1. Inquire if the system of Purchase Orders are still in place.

2. Before you begin work, ask for a Purchase Order.

3. Reference the P O number of your client clearly on the invoices.

4. When sending your invoices, include copies of Purchase Orders documentations.

When a system of Purchase Orders is in place, and you fail to get one before you send in the invoices, or you forget to reference it, the client cannot be blamed for late payments. This will affect the way you mediate resolutions through the Small Business Commissioner if you decide to involve the government.

There was no one for cheque signing

If you intend to do business for a company with this explanation given on the directory, inquire about an alternative payment method such as BACS.

The director is unable to sign today’s cheques.

If you intend to do business with a company that cites this explanation, inquire about the process of invoice settling. If a 2-step process is required including one person raising the check in the department of accounts and a signature’s counter company or even that a director becoming the sole signatory, be clear about the whole process and the length of time it is expected to be resolved. The preferred payment methods should always be e-transfers.

The term is a certain XX number of days.

Pre-agreed terms of payments are critically important. There is a strong incentive to mandate statutory terms of payment to be a month for every transaction. However, for many contracts, this is still not being practiced.

Find out what terms of payment your new client prefers. If these terms do not match your own, propose a different set of terms, or agree with their terms of payment if you find them satisfactory.

Keep in mind that larger corporations operate on varied terms of payment. It is erroneous to assume that one style of terms of payment will be the same for every client.

Payments have been made to a different account/company

It is extremely important to include identifiable, clear instructions of payment on every matter on the invoices no matter what length of time you have been doing business with a company. Their staff could change and having no clear instructions can lead to misunderstandings and missed payments.

Payments are paid on dates set

Before you begin working on any project, find out what the set dates are for authorised payments. This explanation for non-payment can only be valid once if you have given out more than one invoice over a certain period of time.

Responsible person for payments has left the corporation

If the directory states this explanation, it may not be a concern if the relationship you have with your new client is new. The ratings author may have gone through issues but it is valid to expect that the responsibilities of the departed employee will have been allocated to a new staff member that has replaced the previous employees.

If this is an existing client and then you see this cited explanation on the list, then get in touch with the department of accounts to confirm that the staff member’s leaving has affected invoice payments. Ask them what needs to happen so that the invoice payments continue. Find out who has the responsibility for expediting invoice payments.

There is a ready cheque but second signatory for cheque is pending

Please See Above.

Down computer

If this is the given explanation, the situation will most likely correct itself by the time the due date of your invoice comes in. On the other hand, this could also be seen as a tactic for delaying payment.

If it seems as if IT issues are more the rule rather than the exception, and has affected the capacity of your client to get their invoice paid, make a different arrangement for settling invoices. If the invoice needs to be settled manually, then that is fine as well. Larger corporations need backup procedures for settling an invoice, perhaps manually, in the case of system failures. You may even want to explore different alternatives for every client, whether they are a big or a small corporation.

Deceased signatory

Once the explanation for unpaid invoices is that the signatory has passed away, tread gently as this is a sensitive matter. When a client cites this explanation, it is reasonable to expect the responsibility of the person who has passed away be re-assigned to someone else. Remain cautious and give the client time to make the necessary adjustments.

If a client you are doing business with currently has this explanation on the page of the directory for Prompt Payments, be sensitive even if it affects your own arrangements for remuneration elsewhere. Make the assumption that this is a true statement and inquire politely to whom you should forward all the newer invoices from this day forward.

Awaiting a new book of cheques

This is quite likely a tactic for delaying payments. If a company cites this as an explanation and you plan to do business with them in the future, make sure to arrange other payment forms such as BACS before you sign a contract.

Goods didn’t arrive

This is always a possibility to be considered. This may even lead to a dispute with the contract. If this is the given explanation it could indicate that you are going to be doing business with clients that like extracting every ounce of a client’s value, possibly to an unreasonable level. Make sure that your contract is watertight and in place and go through each and every detail thrice to make sure you are as thorough as possible.

Make sure that the structure of your deal is in such a way that every invoice gets paid whether goods and services are not delivered due to a third party’s actions or inaction. This way, your business is not affected whether or not everyone else falls through or not.

Next payments run is the following month

Lower star ratings for payment are posted on our directory by suppliers after payment terms are exceeded after a prolonged period of time. This means clients may have already missed a minimum of one term of payment. Suppliers posting this rating will need to explain that a payment already has been paid, albeit late. This explanation is spurious, at best. It could be indicative of a corporate policy of making payments late.

We only pay upon original invoice receipt

Send a Purchase Order together with the original invoice. Also, send BACS payment bank details displayed clearly on each invoice. Make sure to inquire about what an original invoice constitutes. They might mean a heard copy on note paper with a company head. This is an outdated invoicing methods, but the company you are dealing with might still operate in this manner. Prompt payments might be the result of hard copy on notepaper with a company head. If this is the case, ask for a supply of notepaper with a company header to send to your clients. Complying with everything your client requires will assure you of prompt payments each and every time.

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