Have you ever read a client email twice because you just can’t take what they’ve said seriously? We’ve all done that double take after receiving a client email.
Handling customers who refuse to pay invoices requires some clever communication. You need to carefully manage business relationships and remain professional whilst making sure you get paid.
Achieving this balance throughout the debt collection process can be incredibly difficult, especially as clients can come up with some creative excuses for not paying their invoices.
Here are some of the funniest stories we’ve heard, and how to handle them – so you can get past client excuses for not paying invoices.
1. “I can’t pay for your window installation as rain comes in when I leave the window open.”
Often customers will refuse to pay an invoice by stating that they weren’t happy with the goods or service they received. In such circumstances, always try to remain professional and to avoid burning any bridges. Calming remind them of your term and conditions and stick to your companies policy when handling complaints.
Work out if (and why) the client was unhappy with their experience. Were there any warning signs or negative conversations? Keep dialogue open, identify any real issues and figure out a way to resolve the situation that works for all parties – then ask for payment again.
If you reach an impasse, bring the conversation back to your contract. Outline how the work you’ve done fulfils contractual requirements and again, ask for payment. Remember to maintain written records of all discussions, as these are vital should the situation worsen.
2. “I spent too much over Christmas.”
It’s extremely frustrating when customers use their own cash flow problems as an excuse for not paying – especially because this often means they are passing their financial troubles on to you. Keep in mind the time of year, so if it Christmas, maybe prepare for clients to site this in their excuse.
Deal with this excuse by suggesting the customer pays in instalments. This will allow you to generate positive dialogue and strengthen your business relationship, whilst remaining focused on recovering the debt.
3. “My accountant is in jail so I didn’t get your invoice.”
Occasionally clients don’t receive invoices – but not seeing a bill can also be an easy excuse for not paying. In this instance, offer to resend the invoice whilst on the phone.
Immediately confirm with the client that they’ve received it and lock in a solid payment date. Notify your client that if payment is not received by that date, you will engage a debt collector.
And in the future, prevent this excuse being used in a couple of ways:
Set up email read receipts early in your relationship with clients so that you can see when the emails with invoices have been opened.
The second is to follow up your emails and reminder letters with phone calls to guarantee that your invoices have been received, and noted by someone at the business.
4. “We’re in the process of changing banks.”
Whilst this could be the case, changing banks doesn’t usually take very long. Ask for a concrete payment date, and if they can’t give it to you (or it’s too far in the future), ask for an alternative payment method. PayPal and credit card transactions should still be doable for your client.
5. “I’m not paying my phone bill because I dropped my phone in the ocean while deep sea fishing.”
When your customer seems unaware of their contractual obligation to pay, try to remain patient. Adopt an educational tone and explain that an incident like this does not render the payment contract void. If necessary refer to the terms and conditions of the customer’s initial agreement or contract. You don’t want to lose your patience and escalate the situation. Remember to follow the complaints protocol for your business, no matter how inventive the excuse is.
6. “Our company was liquidated.”
When told this you should immediately check if it is the truth. You can check a company’s liquidation status through the ASIC website. It can also be a good idea to speak to any other businesses who work with your client to check.
If the company is indeed being wound up, lodge a proof of debt claim with their liquidators immediately. If not, politely explain to the client that you can see that they aren’t being liquidated – but if they are in financial trouble, you can arrange a payment plan for their debt.
7. “A dog ate my invoice.”
If an excuse this cliché comes into play it can start to seem like your client isn’t taking your collection process seriously – making chasing debts even more frustrating than usual. Whatever happens, stay calm and use logic to explain that you can easily issue another invoice. Clearly, state a final date for payment, and highlight that if the debt is not paid by then, you will engage a professional debt collector.
If you’ve already tried the above strategies for rebutting payment excuses, it may be time to defer to a debt collection agency. Bringing experts on board can accelerate payment and assure your debtor that you are serious about getting paid. Visit our services page to get started for the experts in debt collection.
Why Prof Coll
Prof Coll is an leading agency in debt collection. We specialise in regaining your lost cash in with a professional demeanour. You can trust 23 years experience in professional debt collection. And we believe we shouldn’t get paid if you don’t. So, if we fail to recover your debt, then the service is free-of-charge! So, if you have debt that needs recovered, call on the experts and fill out our enquiry form here.