Many businesses face late payments at some point. However, not all unpaid invoices mean the same thing. Some customers genuinely can’t pay, while others deliberately won’t.
When a Customer Can’t Pay
A customer who “can’t pay” does not have the money available. This often happens due to financial difficulty, such as falling sales or rising costs.
Common indicators include:
- The customer communicating openly about their situation
- They ask for more time to make payments
- They suggest a payment plan
- Their payments become smaller or irregular
In most cases, these customers want to pay. However, they lack the funds to do so right now.
When a Customer Won’t Pay
A customer who “won’t pay” has the ability to pay, but chooses not to. This behaviour can suggest poor payment habits or disputes. Additionally, some customers prioritise other payments over yours.
Common indicators include:
- The customer ignores your messages
- They delay payments without explanation
- They raise last-minute disputes
- They repeatedly break payment promises
In this case, the issue relates to behaviour rather than financial ability. Therefore, you should act quickly and set firm boundaries. Otherwise, delays may continue and affect your cash flow.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK laws and regulations are subject to change. Please speak to a professional for advice tailored to your individual circumstances. Pi Credit Management accepts no responsibility for any issues arising from reliance on the information provided.