How to recognise and prevent late payers

How to recognise and prevent late payers

Every business will, sooner or later, have to deal with a late payer. When clients suddenly stop paying on time, it affects your cash flow. To avoid this, it’s best to learn how to spot late payers early.

Here are some warning signs to look out for:

How to recognise late payers

Change in payment behaviour

Has your client always paid promptly within the agreed period, but recently stopped doing so? Something is off. This doesn’t necessarily mean they’re facing financial disaster, but it’s worth giving them a call.

Disputes over the order or invoice

Is your client suddenly complaining systematically about your service, product, or invoice? Claiming the quality no longer meets their expectations and demanding refunds or discounts? They may be facing internal financial issues.

Changes in communication

When a client starts ignoring payment requests, repeatedly asks for extensions, and becomes harder to reach, it’s often a sign of problems within their company.

Changes in management

Internal changes at a high level are often a barometer of a company’s financial health. Take the time to occasionally check your client’s management structure.

High staff turnover

Employees often sense when their company’s financial situation is deteriorating. If you notice high staff turnover at your client’s business, it may be time to reassess their creditworthiness.

Negative news in the media

Bad news travels fast. If your client is in trouble, you’ll likely read about it somewhere. Keep an eye on reviews or articles published about them.

How to prevent late payers

Check creditworthiness

Regularly checking your clients’ creditworthiness is always a good idea. This helps you anticipate potential problems.

Develop a clear policy

Checking creditworthiness is one thing, but what will you do with the information? Decide in advance how you will proceed:

  • In which cases will you require an advance payment?
  • At what point will you refuse new orders if there are outstanding invoices?

A good policy not only provides transparency to your clients but also gives your staff clear guidance.

Have clear terms and conditions

Ideally, you’ll never need to refer to your general terms and conditions. But if you do, they should be in order and accepted by the client.

Don’t have any yet? Start from a sample:

Download terms and conditions template

Create a debtor management plan

After how long will you send the first payment reminder? How many reminders will you send? Through which channel (email, registered mail…)?

When will you stop sending reminders, and what will you do next?

Create a clear action plan for yourself and your staff.

What if things go wrong?

Contact Unpaid. If, despite your emails, reminders, and efforts, your client still doesn’t pay, we’ll take over.

Open your claim in just a few simple steps, and we’ll get to work!