Late Payment of Commercial Debts
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Excuse 9: Our system can't cope


All, although this generally only makes sense for the first penalty and specifically when terms are short

Underlying reasons

Customer has agreed short payment terms but as a system which cannot allow them to meet those terms
That was just plain silly
Customer has agreed longer terms such as 30 days but as a system which cannot allow them to meet those terms
Again, plain silly
Few people should have problems with 30 day terms - there really is no excuse for taking that long to make a payment
Customer did not understand what terms they agreed
This can happen, but careful contract management at the start should avoid it
Customer does not believe they have an obligation to adhere to the agreement they have made
Customer 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).
Customer thinks they can blame the computer
Customer may have the idea that they have a system (process, computer, whatever) and that they are not responsible for it - i.e. it takes a certain time to send payments and that is tough. The customer lacks the fundamental understanding that the system they choose to use us up to them, and that they are responsible for it. This can happen when the customer is someone working in accounts and feels they are unable to change their system - they fail to understand that the customer is the company that they represent and that the company is responsible for its own systems or choice of system. They also fail to understand that none of this is relevant - whatever system it is, if they do not pay on time they have a penalty, regardless of whether they have control over the system or not.


  • A credit of the first penalty works well, but important to use as an opportunity to agree terms the customer can meet
  • The penalty charge has at least created the opportunity to sort what terms can be agreed and stop future charges
  • Consider longer terms, such as invoicing a month early on 60 day terms
  • If customer has systems in place that do need very long payment terms, they could fall foul of clauses in the late payment act which outlaw long terms. They should consider fixing their systems.
One technique we have developed for people who claim to have a systematic problem with sensible payment terms is the billing a month in advance for an ongoing service. e.g. Instead of billing for February's service on 1st Feb, bill February's service on 1st Jan instead, and give 60 day terms instead of 30 day terms. Perhaps even give only 50 or 40 day terms. This means payment actually gets made for the service in the same sensible time (February's service paid during February), but it allows for a system that needs longer terms. Some customers will try the excuse of system can't cope when they actually want (but have no justification for) longer terms (i.e. paying later) - this solution meets their stated issues (system can't cope) without giving more time to pay (may even give less time) and usually causes something of a stunned silence as they are caught out...