Excuse 10: We can't do a BACS run
Applicable where customer does a payment run (BACS/cheque)
periodically, but includes payments that are at that point due (or
overdue) rather than payments which would be overdue if not sent in
|Customer does not understand the
concept of credit terms
|Basically, the customer thinks
they are getting a 30 day interest free loan with each purchase, and
getting less than 30 days is not acceptable
|Customer does not believe they
have an obligation to adhere to the agreement they have made
probably has a fundamental misunderstanding that they don't have to do
what was agreed, but that it is fair to do whatever they can get away
with and feels aggrieved that they failed to get away with paying late
when they usually do (with other suppliers).
- A credit of the first penalty works well, but important to use as
an opportunity to educate customer on what the terms actually mean
- Experience suggests customer will not learn, and so future
invoices will need to be pursued before they understand
- Experience suggests giving longer terms will simply mean they pay
later and so still late
- May be worth stopping penalties on their account as sooner or
later they will leave because of some other misunderstanding or point
of principle, at which point a large bill for penalty charges can be
issued and pursued via small claims court without difficulty.
This excuse was used by a customer that did a weekly BACS run, but only
included things due/overdue, and so always paid every invoice a few
days late. They felt that to pay within terms they would have to do a
BACS run every day which they felt was unacceptable (not sure why).
When we suggested the idea of paying invoices that would be due during
the next week, they were horrified as this would mean they did not get their full 30 days free credit.
The idea of only getting 25 days credit was not acceptable to them.
Credit terms are not an interest free loan with every invoice! They are time in which to make payment.