'The dog ate it', fake deaths and other excuses for late payment to small businesses

LAUNCHPAD: Not receiving or losing an invoice is the biggest excuse small businesses get from late-paying customers.

by Rachel Savage
Last Updated: 30 Jan 2015

Hungry canines, stolen paperwork and accidentally (on purpose?) shredding invoices are among the odder excuses of small businesses’ late-paying customers. They also include the downright disturbing, with some companies reporting tardy payers going as far as faking deaths to try and get out of stumping up cash.

Also high on the morbid scale, from the survey commissioned by credit control software company Satago: ‘I thought I was going to inherit some money from my mother, but she is still alive.’

The most common excuse, though, reported by 44% of the 397 small and medium sized firms (less than 250 employees) surveyed, was that the invoice had been lost or not even received in the first place.

Late payment often ends up being a vicious cycle too: 32% cited customers blaming it for their own tardiness. And despite the comic potential of many of the excuses it is costing smaller companies a seriously large amount of money. Their debt burden is almost £40bn, up from £30bn last year, according to Bacs, the company behind direct debit. That doesn’t take into the account the cost of constricted cashflow and chasing overdue payments either.

In contrast, larger businesses are owed just £6.7bn and wait an average of 48 days to get paid, 23 days less than small companies. If they want to come over all responsible and cuddly they could do worse than taking up the cause of late payment.

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