Customer Excuses and How to Deal with Them
There are many reasons why customers don’t pay – they can be disorganised, records not up to date, lose the invoices or bookkeeper comes once a month. Others do not control their cash flow and spend too much money or don’t collect their outstanding debtors. Some have no intention of paying in the first place. Whatever their reasons for not paying, these payment avoiders will come up with a myriad of excuses.
- The cheque is in the mail. (Some people still insist on using cheques.)
- I’ve never received any invoices or reminders.
- I haven’t been able to get my partner’s signature to the cheque.
- I’ve moved to a new address and none of my mail has been forwarded.
- I have been away on business and have not had time to catch up on the bills.
- I couldn’t find a parking space near your building when I came to deliver the cheque.
- My dog has eaten the invoice. (Believe me, people have used this)
- The accountant has been away.
- I have told my accountant to pay the bill but he appears to have overlooked it.
- Did I really send you a cheque without signing it?
- There is a $2 debit on my account from about two months ago, which isn’t right and I won’t pay the bill until it is rectified.
- I will pay you in full when the next delivery arrives.
MORE SERIOUS EXCUSES
- We can only pay from original invoices, not faxed copies.
- Some small businesses keep faxing copies of their invoices as reminders that the invoice is still outstanding instead of sending statements.
- We are still waiting on approval of the invoice.
- This happens in companies that have departments and the like.
- We need proof of delivery (POD) before we can pay.
- Some mining or construction companies require this.
- When I get paid you will get paid.
- Businesses should be able to finance their jobs. Why can’t they pay a part payment now?
UNACCEPTABLE EXCUSES
- The boss is out of town for a week or two and will not be able to authorise payments until he gets back
- Does the business get put on hold while the boss is away?
- My spouse pays the bills
- What is her phone number?
- Our accounts person quit.
- So, has the whole business stopped?
CUSTOMER COMMUNICATION
- I have a dispute with the invoice/job/service
- Refer to your Complaints Policy.
- We are having serious cash flow problems/I don’t have any money
- Ask more questions to identify whether the customer is stalling or is genuinely in hardship. You may be able to negotiate a payment agreement. If they are experiencing hardship, then refer to ACCC debt collection guidelines.
DEALING WITH THE EXCUSES
Rather than reacting to the customer’s excuses, be proactive, take control of the conversation and have questions ready to ask the customer. The Biz Skills online lecture courses have a phone script to download with heaps of questions to ask and statements to make to the customer so you can explore the real reasons you have not been paid and when you are likely to be paid.
Watch a preview of the Effective Debt Collection Strategies or Debtor’s Ledger Management courses.
Visit Queensland Government Business website for their advice on chasing debtors