3 Steps to Deal With an Angry Vendor & Late Payment Invoice

May 7, 2020

Angry vendor

You may wonder how to deal with a late payment, as either a company providing services or purchasing them from a vendor. Being on either side of the coin is not fun, especially when cashflow is a higher priority. You want to ask for payment without being rude, or in this case wanting to address a friendly reminder proactively.

Angry Vendor

A company’s account payable (AP) operations could easily have a major impact on its overall success. What that means is that businesses should be following best business practices if they’re going to make their mark on the business world and continue staying ahead. This includes building credit, avoiding the collection agency for as long as possible, and establishing a reputation as a paying customer.

Despite we all know about the importance of paying bills on time, it’s quite common for entrepreneurs and business owners to find they are dealing with angry calls from vendors because of overdue invoice payment. They also often receive emails and other written threats from vendors. You need to know how to handle these for your business and to prevent vendors from charging a late fee.

Guidelines For Dealing With Payment Reminders Emails And Phone Calls

Step.1 Verify the invoice

Before pushing through the payment, business owners should consider that it might NOT be their own fault. In some cases, it’s an error on the supplier’s end. This happens all the time.

Perhaps the vendor has improper accounting records. It is just as plausible an explanation as to the one where your accounting department is at fault for not making that particular payment. We have seen this happen many times where vendors fail to keep an account of unpaid invoices. They may lack the infrastructure or organization to send out bills in a timely manner.

 

In other cases, it could be a scammer trying to get money out of you and imitating the vendor. The Federal Trade Commission, or FTC, calls this phishing. Check the emails or phone calls for typos. Call the company’s customer service if you feel that an invoice is shady. The angry person may be someone hoping to bank on your impulse to pay immediately without checking.

Another step is to match the invoice number with others that you’ve gotten. PayPal numbers invoices automatically, so they have a pattern logic.

Suppose that you have verified the caller or email is legitimate. Often, the threatening vendor might be pretty forceful. It is important to consider that they might not have it all together on their end. It’s imperative to slow down and resist the urge to panic.

Don’t push the invoice payment through too quickly. It can negatively affect you, your AP team, and your entire company. It can cause elevated stress levels for everyone involved when the demands from the vendor include an invoice that might not be valid.

Step.2 Let your accounting process play out

Invoices can come in that are actually duplicates or have incorrect accounts receivable information. Maybe the amount or the quantity is completely different from what the company and the vendor originally agreed upon. While those are all things that a well-designed accounts payable system should catch, if an invoice is pushed through the system by an angry vendor, then the checks and balances of the AP system get skipped or bypassed. This could cause things like invoice discrepancies to get missed.

If you have a proper accounting process, you could rely on that system working and be able to reconcile the issue. It should also ensure that whatever is paid to the vendor is exactly what is supposed to be paid. In the event that you receive threatening calls or emails and the vendor starts coming down hard on your accounting department, causing them to forcefully push the payment through

Step.3 Deal with it

If the invoice turns out to be a valid one, don’t panic. The point is that slowing things down while taking a good long look into the company AP system/processes can lead you to identify whether or not the vendor’s demands are legit or not. Are their threats backed up by fact and is it true that they simply weren’t paid on time? If so, then it’s definitely important to get busy and process the payment as quickly as possible.

However, then it’s extremely important to investigate the AP system and AP processes. Identify where it broke down, what happened and why, and which chain in the AP process is actually broken. Fixing the chain and the process can ensure that the situation won’t ever happen again in the future.

Implement An Automated AP Process if You Don’t Have One.

In many ways, your accounting can benefit exponentially from implementing AP automation, E-invoicing, and Dynamic Discounting. In these cases, the payments are taken out of your bank account or credit card on a certain day. You just receive an email notification, or accounting does. Later you can check payments against credit cards.

For example, invoicing errors and misplaced threats on the part of a vendor could be nipped in the bud as soon as the invoice was submitted electronically to the AP department. The automated system would catch it immediately and eliminate any confusion, stress, or even overpayments. In general, it can eliminate late payments, prevent errors, and save a great deal of time and money.

Manage Your Cash Flow More Easily With DeepSky

At DeepSky, we’re well acquainted with these processes and can help any business. Whether a startup, small-medium sized or well established, we work in just about any field of business to set up these systems. Our Financial WingmanTM program is designed to help you with any accounting obstacle and help you pay on time.

Contact us today to get a quote. Make sure that you get paid faster, build your credit score, and ensure your business will thrive with our help.