The Number 1 Reason Your Commercial Invoices Are Not Getting Paid

We could not think of a more enticing headline to a blog if we tried, so please forgive the clickbait, but this week’s blog is much more than that. It contains a discussion about something that we actually have very firm convictions about. And yes, unlike some of the clickbait you come across on the internet, we will be giving you our opinion on the single biggest reason that commercial invoices are not paid when they should be.

One of the many advantages of having so much experience in, well, anything really, is that the longer it is done, the more reliably you can rely on any patterns that tend to emerge as a result of whatever action it is that is being analysed. So a career in various credit management roles before JSP Credit Management being born of over 15 years has left us extremely well placed to pass comment on some potential causal factors affecting non-payment.

One of the other advantages to such a review is that, especially when it comes to debt collection, it is centred around an activity that is high in volume and transactional value. To highlight that point, conversely, if we were trying an identify changes in behaviour in our two pets dogs at ages 1 and 10 (in human years), you might be inclined to question the reliability of any conclusions drawn. Why? Well, it is only two dogs for a start and in the 10 year study period, there is a great deal of other potential factors to consider as part of the conclusions.

When it comes to chasing up unpaid invoices, however, it is a transaction it is not uncommon for a quick phone call to take 30 seconds before you can move on to the next line on your ledger, having written a quick note that your customer is paying you at the end of the month according to their purchase ledger system. Doing 30 of these a day is realistic by anybody’s standards, and more are often achievable and expected of debt collectors in their roles.

So, in a standard 20-day working month then you might get at least 600 data points to work with, which equates to 7200 a year, or 108,000 over 15 years. If you are into your empirical evidence and read any report containing a sample size of 108,000 in it, you would not normally be using the sample size as a critique of the study. Don’t worry this is not going to turn into an academic article but we think it is worth noting the depth of the numbers underpinning what at first appeared a bit of clickbait at the top of the blog.

So, time for the big reveal. The single biggest reason that commercial invoices do not get paid on time is that they are not billed correctly. Although we have not recorded the responses we have been getting over the years when making our payment enquiries over the phone and via email, if we did, we would have been able to demonstrate without a shadow of a doubt that the response we most often get is, “I have not got a copy of that invoice”. Yes, our ‘sent items’ folder needs a serious clear out. It is jammed packed with PDF copies of invoices, and we imagine some of yours are too.

For us, that is thrilling (yes, we are sad). Thrilling because we believe it is so easily fixable. It is not like we need to try and define the meaning of life here or anything, we just need to ensure that our customers are receiving our invoices. It doesn’t and shouldn’t sound like too much to ask, right? Well, yes and no. The numbers speak for themselves, so there must be something getting in the way of such a solution and we would do well to consider what it is.

Well, before we get too deep into it, sometimes, it is just that the customer has misplaced it, not uploaded it onto their purchase ledger system yet, or is being dishonest. Yes, we said it. We have learned to become healthily cynical over the years and it has served us well. If we put ourselves in their shoes, it would be perfectly rational to make up an excuse that would allow them another month to pay because the delay means we have missed their monthly payment run.

But this blog is not about your customers, this is about you. Were intending on focussing on the things that we can control the most and in our experience, it is a lot easier to implement changes within the company and department that we work for than it is in the purchase ledger department of your customer. So the question we first think of when we find this pattern repeating itself with new clients is, “why are you allowing them to use that as an excuse?” Invoices need to be emailed to your customers, not posted.

The other piece of important advice to be considerate of is if your customer operates on a purchase order system, then actually look at the purchase order when it arrives. That is your customer. Not the person on the phone who initially ordered the product or service. Often, they are two separate people and sometimes requires billing a different subsidiary of the company you thought you were dealing with. The PO is your reference point for billing details.

The problems mentioned above are not limited to specific types of companies by industry or size, we have seen it happens across a whole variety of different companies but the one thing they all have in common is that this poor practice will undoubtedly affect collection rates, and if it is affecting collection rates, it is affecting cash-flow. We have written many times over about the importance of cash flow and it is a point that will never be overstated. No cash, no business.

There are a great many other points that could have been brought up in this blog, but in an attempt to keep it to a size that does not lead to you falling asleep at your desk we try to keep it reasonable in size. However, we are not just here to slap commission rates on provisioned debts for companies and set about recovering it for them. We are here to educate wherever possible too. If the above has whetted your appetite for a more in-depth discussion about what you can do to further improve your collection rates then get in touch.

We are still here to do a bit to businesses safeguard their cash flow against late payers or debtors that are refusing to pay, so if you have been struggling to get an invoice paid and would appreciate the support of a team that prides itself on operating in a way that is mindful of the above then visit our website at or contact us on 01827 66820 to discuss your needs. We operate on a no-win-no-fee basis for bad debt recovery and our credit control and credit risk services can be ordered via our website with the littlest of hassle.

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