There is never a cast iron guarantee that one will get paid, but it is still prudent to take certain precautions before granting credit.
The excuses not to pay are a mile long and here are some of the most common and ways to counteract them.
1. â€œThe cheque is in the postâ€.
The oldest line in the world. As you donâ€™t have any influence over Royal Mail, itâ€™s the debtors responsibility to put alternative arrangements in place to ensure you are paid in good time.
2. â€œWeâ€™ve run out of chequesâ€ or â€œWeâ€™ve lost the cheque bookâ€
BACS and CHAPS payments are far more common these days and most businesses have access to on-line banking.
3. â€œI am waiting for a copy invoiceâ€.
A copy invoice can generally be scanned and e-mailed in minutes. Once confirmed the email has been received, always get the debtor to commit to a date as to when you can expect payment.
4. â€œWe are waiting for the customer to payâ€.
While it enhances a client relationship to have some sympathy with their cashflow issues, their cashflow it is not your responsibility, and besides you have your own to worry about. Remind the client of your agreed payment terms, point out the additional time they have already had and insist on an expected payment date.
5. â€œThe signatory has been in hospital / is on holidayâ€.
Again, not your responsibility and it is up to the company to put alternative arrangements in place. Insist on an expected payment date.
6. â€œWe are going into liquidationâ€.
Request the name and details of the Insolvency Practitioner. There should be no delay in giving you this information.
7. â€œThere is a dispute with the invoiceâ€.
After three months? Insist on the issues stated in writing immediately and endeavour to get them resolved as soon as possible. Keep an audit trail of all communication.
8. â€œOur internet is downâ€.
Request a cheque payment, send a courier to pick it up if necessary.
Some of the more extreme excuses we have come across :-
â€¢ â€œThe dog ate the cheque bookâ€.
â€¢ â€œI was struck by lightningâ€.
â€¢ â€œMy young son threw the cheque book in the fireâ€.
â€¢ â€œI am changing banksâ€.
For free initial advice or a general discussion, please contact AR Legal Collections on +44 (0)20 8202 0730.