There are probably very few people out there who get excited when they received a bill or invoice with an amount due. For many customers, paying certain invoices is not a top priority when it comes to the grand scheme of their financial breakdown, which is not the best situation for you and your receivables management. However, there are numerous reasons why people do not and will not pay what they owe. These reasons come with varying degrees of validity and are a case-by-case situation. Here are some of the top reasons that paying their bill is not your customers’ priority, from the lesser legitimate to the more reasonable.
Sometimes you need to consider why your customers’ money seems to be in a bind.
1. Not Wanting to Pay: “Your Invoice Isn’t My Top Priority”
There are some customers who just do not have any interest in paying their invoices. Sometimes this mentality is accompanied by a prioritization problem. Your customer feels that other bills need to be paid before dealing with yours. You might even have customers who will argue that aesthetic fees, like getting their hair done or buying new clothes, took the funds that would have been collected by you.
2. General Confusion: “I Don’t Fully Understand How Bad It Is to Not Pay that ONE Invoice!”
Debt collection can be a confusing thing for some, especially those who consider themselves money novices. They might not have the knowledge or foresight to realize that slacking or “not remembering” to pay any bill can do much more harm than making a partial or installment payment. They might even believe that having a low balance in their bank account is worse than missing just that one invoice. This slippery slope is partially a prioritization issue like not wanting to pay, but one must consider that there are people who just don’t understand. Perhaps if they did, they would be more disciplined and committed to paying on time.
We all get confused from time to time. Maybe this one late invoice will be the light bulb moment for your customer to get their act together for payment.
3. Unable to Pay: “The Debt is Beyond my Means to Handle”
Among the most common rationale your receivables team will hear for not paying an invoice on time, or at all, is that your customer cannot pay the amount owed. There are a variety of reasons that your customer does not have the money available, some more understandable than others. When considering debt collection, it is important to understand that your customers are individuals with their own circumstances that should be examined to completely understand their state of financial being.
One reason a customer may not pay might be due to loss of a job. This unexpected occurrence can throw even the most consistent customers into a tailspin and cause them to become delinquent with what they owe and send them marching down the debt collection road.
Another reason customers, including your most reliable, cannot pay your invoice might be due to an unexpected and life-altering medical issue. In addition to the emotional and physical toll a surprise diagnosis or sickness can have on a person, medical bills can be perceived as insurmountable.
Health care and expenses go hand in hand. Combined with the emotional factor, it’s easy for your customer to lose focus of your invoice.
Everyone person is different, as is the reason they have fallen into your debt collection category. To be able to retrieve the funds you need, it’s important to be aware of these common reasons your customers do not pay their invoices. This can help to create more effective methods and solutions for getting your payment. The best solutions always come from a full and complete understanding of the problem.
Learn more about how to optimize your revenue and other ways to optimize your debt collection process today with our outsourced receivables management program today.
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