Why do customers think it is ok to pay late?

  • Customers are waiting to be paid – this could be a perpetual circle where you are waiting for payment because your customer is waiting for payment and the person paying your customer may be waiting to be paid. Nearly ¼ of late payments are a result of this knock-on effect.
  • Customers are disorganised – a further ¼ of customers acknowledged that their accounting system is disorganised and they were unsure about who they owe money to and when they need to pay them.
  • Customers have their own payment terms – this is probably the worst because the customers have not acknowledged your payment terms and have put their own payment terms in place for when they have decided they can pay you.


None of these reasons are good, and what effect will late payments have on a small business? In South Africa where small business is a major contributor to the economy, late payments are highly detrimental. They can cause small business to collapse and they will prevent business from entering certain markets.


What can you do to encourage people to pay on time?cash, card, eft, COD

  • Be clear about payment terms – make sure you let your customer know clearly about what the payment terms are before you start doing business with them.
  • Make accurate and timeous invoices – this is the most critical part to ensure getting paid on time. It is important that all the information on the document is correct, confirm that you have the correct contact number and email address of the person responsible for paying the invoice and ensure you send the invoice out directly after the job is done if you do not hand it to the customer at the time of completing the job.
  • Give different payment options – you may benefit by offering your client a few ways to pay, fewer people carry cash these days so make sure that you can offer credit card facilities, or ask them to do an e-wallet payment, if these aren’t an option offer them an EFT payment as a last resort.