Late Payment of Commercial Debts
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Excuse 6: Person who writes cheques was on holiday

Applicability

Payment arriving late, but particularly when on short payment terms

Underlying reasons

Short payment terms (e.g. 7 days) and payment arrived late because someone on holiday
Customer has agreed short payment terms when they cannot meet them
Who is responsible for the person that is on holiday - why did these things not get planned in advance (write some blank cheques and leave with responsible person, etc)
Short payment terms (e.g. 7 days) and payment arrived late because someone was sick
Customer has agreed short payment terms when they cannot meet them
Customer should consider contingencies for such things
Longer payment terms (e.g. 30 days) but payment was left to last minute and someone on holiday
Knew that payment would be needed when on holiday, so no excuse
Longer payment terms (e.g. 30 days) but payment was left to last minute and someone sick
Don't leave payments to last minute then

Resolution

  • A policy of credit for the first occasion can be useful, and in future the customer can consider making contingencies and making payments promptly
  • If payment terms are short then consider longer payment terms, as long as customer does not treat them as a "do nothing for 28 days and then pay it" and so have the same problem.
  • Customer should be made aware that they have a liability to all suppliers that were paid late, not just us, so should plan better in future