Warning Signs Of A Client Who Isn’t Going To Pay
Warning Signs Of A Client Who Isn’t Going To Pay
Do you have clients that are starting to become problematic when it comes to payments? Are you starting to suspect that you may not be paid on time?
When it comes to running a business, it is an inevitability that you will encounter late payments. As much as these are unfortunate, it is extremely important to remember that these are completely normal.
Late Payments can usually be resolved amicably with the client and will, in turn, allow business proceedings to continue as normal. However, there are times when a late payment can be a sign of the beginning of a series of excuses which result in the client not paying you at all.
One of the most important aspects of running a successful business is to sustain and grow its cash flow. If the time comes and you are owed money by a client that has shown no indication of paying, this will leave you with financial difficulties and your finances will be affected.
Trying to identify whether or not a client intends to pay is difficult, but there are tell-tale Warning Signs Of A Client Who Isn’t Going To Pay that you should look out for.
In this article, our team of Debt Collection experts have put together a list of the “Top 5 Warning Signs Of A Client Who Isn’t Going To Pay”.
Top 5 Warning Signs Of A Client Who Isn’t Going To Pay
The Warning Signs Of A Client Who Isn’t Going To Pay listed in this article may happen every once in a while, as businesses will no doubt face some form of financial difficulty in its lifetime.
If you experience one or more of these on a regular basis, then this may be a clear sign that your client has no intentions of paying you for services or goods that you have provided.
1. Lack of Communication
One of the earlier Warning Signs Of A Client Who Isn’t Going To Pay is a lack of communication.
There is no legally binding contract that says a client has to reply to your messages or return your calls quickly, and there may be valid reasons should your clients not communicate quickly with you.
Other elements may also be the reasoning for lack of communication i.e., emails can easily become lost etc. However, if you have come to the point where your client is clearly deliberately avoiding your emails and declining your calls, this may be cause for concern.
It is easier to ignore an email than a phone call, so when your client is ignoring calls this can add to the warning signs.
The lack of communication from your client may well be an indicator that they might not be intending to pay, and it is important that you continue to chase in order to speak to them regardless.
2. Client Keeps Making Excuses For Not Paying You
It is normal for a client to have excuses for why they have forgotten to pay on time or have missed invoice payment dates. When the same excuses crop up more and more, the client should be investigated.
Excuses that we have heard over our long history include:
- The client has forgotten to pay the invoice.
- They are experiencing financial difficulties and your payment has lost priority
- Invoice has been lost or they have never received it
- The client’s accounts team are out of the office/too busy at the moment
In most cases, the reasonings for these excuses is to delay or avoid the payment altogether. When this occurs, it is only right to question the client’s ability to pay you.
3. Requesting an Extension on Payments
It is not a serious concern when your client occasionally requests for a payment extension, as like with every point on this list, there may be valid reasons. However, if this becomes an unusually common occurrence then you should know that something is not right.
This should provide an insight into the financial situation of your client, and that they will more than likely not pay you for the services you have carried out.
4. Disputing a Payment
Payment Disputes are unfortunately quite common among organisations that do business together and are usually related to the details within the invoice. There is a valid reason for this, however, as some companies cannot accept invoices if they have wrong information on them.
When a client continually disputes your invoices for “problems”, however minor or petty they may be, then you should prepare for the inevitable and consider that they intend to not pay.
5. Changes To The Client’s Credit Rating
Within an organisation’s credit-control team it is common practice to credit check a company before you work with them. This is to give you an indication as to the state of their finances and will in-turn help you to decide whether you want to do business with them or not.
Throughout the relationship with the client, it is important to continually monitor their credit rating, especially if they have shown signs of late payment or any of the points already mentioned.
This can usually be done automatically, with online credit rating services sending email notifications when a client’s rating changes. If they drop significantly and enter lower-tier credit rating, this can be an indicator of no payment forthcoming.
Where To Go If A Client Hasn’t Paid – Federal Management
If you initially had a gut feeling that your client may not have any intentions of paying you, this article should have provided food for thought in regards to your current situation.
When a client does not pay, it is important to know where to go to have your money recovered quickly, as all hope is not lost. The only solution to the recovery of unpaid debts is Federal Management, as we are the UK’s first choice for all Commercial Debt Collection needs.
Throughout our long history of collecting debts, we have recovered millions of pounds on behalf of a plethora of sectors. We ensure a quick, hassle-free and cost-effective method to getting your money back to you.
If you begin to spot the Warning Signs Of A Client Who Isn’t Going To Pay, Get in contact with our team of expert Debt Collectors today to get the money back to you that you are rightfully owed.