How to Deal With a Customer Who Claims They Can’t Pay
Every business owner has heard it at some point:
“I want to pay you, but cashflow is tight right now.”
It’s a difficult position to be in especially for tradesmen and small business owners who rely on steady income to keep their own operations running. You don’t want to appear heartless, but you also can’t afford to let unpaid invoices pile up.
So, how do you strike the balance between understanding and protecting your business?
1️⃣ Don’t Take Their Word at Face Value
When a customer claims they’re struggling financially, your first step should be to verify, not assume. Ask direct but polite questions:
“When do you expect your next payment to come in?”
“Can you provide a part payment now to show goodwill?”
“Is this a temporary issue, or are you currently unable to meet other obligations too?”
Genuine businesses usually appreciate honesty. If someone becomes defensive or vague, that’s often a red flag that they’re prioritising other creditors over you.
2️⃣ Offer a Structured Short-Term Solution
If the customer is genuinely facing short-term cashflow issues, offer a clear, time-limited plan rather than open-ended sympathy. For example:
A split payment over two or three weeks.
A partial payment now to keep their account in good standing.
A written agreement confirming dates and amounts.
This shows flexibility while maintaining control. Never agree to long-term “promises” without something concrete in writing.
3️⃣ If They Won’t Cooperate — Take Action Immediately
If a customer refuses to agree to a payment plan or simply stops engaging, don’t delay. This is the point where many business owners lose money by waiting “just another week.”
When someone ignores reasonable offers to work together, it’s usually because they:
Don’t intend to pay, or
Are prioritising other suppliers ahead of you.
Taking swift action whether that’s a formal letter before action or referring the matter to a debt recovery agency sends a clear message that you’re serious. Every day that passes reduces your chances of recovery.
4️⃣ Be Realistic About the Risk
If a company is struggling with cashflow, it’s a warning sign that they may not survive much longer. Once they go under, your chances of getting paid drop dramatically.
That’s why the goal should always be to get as much as you can, as soon as you can. Even if it means accepting a slightly reduced settlement, a part payment today is often better than a full payment that never arrives.
Protecting your business means recognising when a situation is deteriorating and acting decisively before it’s too late.
5️⃣ Avoid Becoming Their Bank
Empathy is admirable but it can’t come at the expense of your own financial stability. Every unpaid invoice means you’re funding their business instead of your own.
Good clients respect firm boundaries. The ones who take advantage of kindness usually repeat the behaviour elsewhere.
6️⃣ Keep It Professional
Frustration is natural, but emotion can damage your position. Keep all communication professional, written, and factual. Avoid threats or emotional language focus on resolution and record-keeping.
If things don’t progress after your agreed timeline, escalate. A formal letter from a debt recovery agency often changes the tone instantly it signals that you’re serious but still professional.
7️⃣ Learn for the Future
When a customer struggles to pay, use it as a learning opportunity:
Tighten your payment terms.
Request deposits for new clients.
Credit-check high-value customers before taking them on.
Prevention is always cheaper and easier than recovery.
Final Thoughts
Compassion and professionalism aren’t opposites they can coexist. The key is to help where reasonable, but never at the expense of your own business’s survival.
When clients say they can’t pay, show understanding but back it with structure, accountability, and decisive action.
If despite that, payment still doesn’t come through, that’s when professional recovery becomes necessary.
At Hays Collections Ltd, we help small businesses and tradespeople recover unpaid invoices quickly and fairly — even when the debtor claims to have “cashflow issues.” Our approach balances professionalism with results, on a no collection, no commission basis.
