Are customers using the pandemic as an excuse to not pay?

You will have heard this a hundred times by now, but we are living in unprecedented times at the moment. The pandemic is a global crisis and it has far-reaching consequences, as many business owners will already no doubt realise. Families, communities and society as a whole – we are all feeling it.

Some of us will be impacted more than others, naturally, and there will be cases where individuals and businesses alike will be seriously affected by this disease. What this means is that an amount of forbearance should be practised – this is where we all need to come together and help, not pull apart and ignore.

That being said, overheads and wages still need to be paid, whether businesses can trade or not. Of course, this also includes the fact that provided goods and services will need to be paid for too.

Our news channels are full of stories of empathy, support and general human kindness, but business owners will know there is a different untold story. 

There will always be that element that will look to take advantage of situations, such as the one we currently find ourselves in and use them to not pay debts. Being paid for hard work is, after all, just as much about fairness as it is about, law, contracts and agreements.

The pandemic is not always a valid reason for late payment

There are many industries where the virus ground caused them to come to a grinding halt. Sectors such as activity centres, restaurants, pubs, tourism have all had a bad time but there are also areas such as dental offices.

So, yes, many business sectors have been greatly affected and shut down – with some businesses facing permanent closure. However. It is important to remember that many businesses can still operate pretty much as normal. It is these businesses that you don’t expect to pull the ‘Corona card’ when claiming they cannot pay invoices, but many are.

While forbearance is important, some business customers are just hiding behind the virus as a reason for non-payment.

Bearing that in mind, and if your customers are one of the types that can continue to operate regardless of Coronavirus, then you need invoices paid. But if they are hiding behind the pandemic and using it as an excuse to avoid paying, what can you do?

Keep lines of communication current and open

Making sure that your invoices are paid during challenging times requires a little care – whether claims of being unable to pay are false or not. Keeping communication lines open can often avoid disputes and, importantly, an outright refusal to pay any invoice at all.

Keeping things polite and professional always helps, as does requiring deposits before any work starts or even the whole sum if it isn’t too much. Timely invoice reminders kept polite, should also be given.

Of course, keeping lines open can also help you determine if a debtor is genuinely having financial issues or not.

Review your options if invoices remain unpaid

It is worth remembering that most genuine debtors are more than willing to work with you to reach a constructive agreement. That said, sometimes stronger action is sometimes required – particularly if you suspect them of just using the Coronavirus pandemic as an excuse, as many in certain industries are – you have to protect your cash flow, after all.

Options open to you could include:

LBA – Letter Before Action. Don’t be put off by asking a debt recovery agent to send a Letter Before Action. It is a strong signal of intent that many companies will not ignore, and they can often lead to an outcome on their own.

Debt Recovery Claim – if the company doesn’t respond to an LBA, or fails to pay, then getting claims proceedings started is the next logical step.

Debt Recovery Enforcement – While enforcement agents are not currently permitted to attend residential properties, they can visit business premises to recover debts or goods to cover debts.

The debt recovery enforcement stage would only be possible if the business is still open. Of course, if they are using the pandemic as an excuse then they most likely will be at the business premises. 

To conclude

While many businesses are legitimately facing financial challenges of their own, and most can be dealt with ‘softly-softly’, there are a lot that is simply not. You deserve to be paid for your hard work, and using a pandemic as an escape clause should not be an option for these businesses.

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