7 Reasons Customers Delay Payments

When several clients regularly fail to make payments on time, it can be a frustrating and confusing experience. Even more so, delayed payments can impact your business, regardless of the reason. If you’ve noticed an uptick in your clients falling late on their payments, it’s time to do a bit of analyzing and introspection to determine the root cause. From there, you can understand what changes you need to make to resolve the problem.

Why do customers delay payments? Explore several reasons why payments are late and how you can fix them.

reasons customers delay payment

1. The Customer Says They Already Paid

Often, customers will tell you they already paid a bill when your records say they haven’t. This discrepancy can cause a few headaches and some confusion for both parties involved.

In some cases, you’ll find that the issue is simply that you sent them the invoice at the same time they sent you their payment, resulting in the two passing each other in the mail. The solution here is to think about moving to an e-invoicing system so that your customers only pay after the invoice is posted in the system.

However, you might also have problems with your cash application methods. The issue could be that your customers are correct that they’ve already paid — your system is just outdated or unorganized. Make sure you’re properly applying payments to the right invoices and accounts as a company to make the payment process easier.

2. There’s a Dispute With the Invoice

An invoice dispute may come in a few different forms. Maybe a customer was told by your sales team they get 20% off on a certain order, but your accounts payable team was never aware that was the case. As a result, they charged the customer more than they expected to be charged, and now they’re disputing the payment. No matter the reason, a customer payment dispute can lead to a delay.

While you can’t avoid disputes all of the time, you can do your best to get ahead of them. Ensure your teams communicate with each other about pricing, payment terms and other variables that may lead to a dispute. If you notice a trend leading back to unsatisfactory services, you should take a closer look at your services.

Learn more about debt collection services.

3. The Customer Is Waiting for Their Own Payment

The reality could be that your own customers may be waiting for payments. Many businesses prefer to wait until they’re in a good financial position to pay their bills. If a customer has a list of invoices they need to pay, they may not pay your invoice as soon as expected.

These late payments can’t always be avoided. However, you can quicken the process of receiving your payment. Cultivating a good relationship with your customers will help you gain transparency about their situations. When a customer understands you care, they’re more likely to communicate with you, and you can adjust your expected cash flow as a result.


4. The Customer Never Got Their Invoice

When you send invoices in the mail, they may get misplaced in transit or when they arrive at the intended businesses. Even companies that use e-invoices can send invoices to the wrong people, resulting in the right parties never receiving their invoices.

If a common reason for late payments at your business is failure to receive the invoice, the best fix is to review your processes. Check that you have accurate information for each customer you work with so you can ensure the correct people receive the correct invoices. Work alongside relevant departments to see that everything is organized and recorded properly.

5. There Was an Electronic Billing Problem

For companies that use electronic payment systems, technology issues can lead to delayed payments. For example, a customer might forget their password to log in to their payment portal, but your system doesn’t have an easy way for them to reset it. These errors can increase the amount of time it takes to make a payment, frustrating customers and increasing the payment delay.

Be sure that the program you’re using is easy to use and access. If a customer has a question about the system, make sure your support team can give them a prompt, informative answer.

6. The Customer Forgot or Refused to Pay

Has a customer ever told you they forgot to pay the invoice? This response will often be genuine — life happens. Other times, your customers may be stalling a bit with payment excuses until they can afford to pay you. Either way, prioritizing communication with your customers may help.

Send each customer an automated reminder a few days before their invoice is due. This message will keep payments front of mind and give customers a chance to update any outdated login or payment information that might delay things. It can also give them a chance to communicate with you about certain issues, like requesting a payment plan.

Of course, you’ve likely also run into customers who simply refuse to pay. If you have a specific customer who continues to make late payment excuses, your best option may be to consider moving on from your relationship with them. Otherwise, you should continue to make sure your customers are satisfied by checking in with them regularly — the more you meet your customers’ expectations, the less likely they’ll be to use delaying tactics on you.

Learn more about collection litigation services.

7. The Customer Can’t Afford to Pay

Sometimes, customers simply can’t make their payments. Maybe they’re struggling with their cash flows or have recently experienced other financial issues. In that case, it pays to help them out a bit. Consider offering a payment plan so that you still get paid and your customer can take a bit of a financial breather.

To prevent a cash flow problem from happening in the future, do enough research on your customers, such as through credit checks, to ensure they can reliably pay you back for your services.


Contact Altus for Commercial Collections Assistance

No matter the reason why there’s a delay in payments at your company, it’s crucial to have a plan in place to take action when necessary. By working with a b2b debt collection agency like Altus, you can recover payments from delinquent customers with ease.

At Altus, we have more than 25 years of experience helping clients just like you gain control over their credit-to-cash cycle. In fact, Altus has the industry’s highest recovery rates. Trust Altus to recover your debts with the best expertise and resources among commercial debt collection specialists.

Ready to learn more about how we can help your business? Contact us today to get in touch with one of our representatives.