Common Excuses Technology Companies Hear When Trying to Collect Debt

Debt Collection Agency for Software Technology Industry

Modern businesses have embraced the use of technology in various company operations. Technological firms offer different types of solutions that improve customer satisfaction and service delivery efficiency of commercial enterprises.

However, tech firms face many challenges when following up on payments. Some of the solutions are sold at a one-off fee, but several IT products are available on a subscription basis. The recurring fees mean that the client companies have to pay a monthly, quarterly, or annual cost to the technology experts. However, some clients fail to pay on time. The delayed fees lead to a pile-up in bad debts. Below are some of the most common excuses technology companies hear when trying to collect long overdue payments

  1. The Software Solution Failed to Perform as Expected

Many clients with late payments claim that the software solution did not perform as expected. In other cases, customers argue that the technology was utterly incompatible with their system.

Customers are likely to seek alternative software companies if technology cannot meet their expectations. The incompatibility may occur in the form of ‘actual errors’ (the program fails to operate) or ‘understanding errors’ (client expects a different outcome).

The best solution for incompatibility problems is an automated payment system, as failure to pay leads to service deactivation. Software companies that cannot charge their services automatically should hire a collection agency to remind the clients to pay pending invoices. The agency’s communication will notify clients that the payments have been delayed for a specific period and highlight the next course of action.

  1. Financial Strains

Loyal customers may also attribute the inability to pay technology services to a lack of funds. Financial crises often spook companies into extending their payment terms by 90-120 days. Vendors usually agree to the terms to avoid losing reliable customers.

Beware that customers may start complaining about high prices if the technology provider increases renewing rates abruptly and without consulting them. Any change in the cost of IT services has to honor the existing service contract. If the software is not cost-effective or requires more employees to function effectively, many organizations will reject it. They will decline to pay subscription fees and resort to old ways.

Many organizations want cost-effective solutions. Technology that is hogging and slowing down production means that the organization’s revenues will dwindle.


Therefore, the technology provider must be aware of these facts and create a product that will increase the company’s income instead of escalating expenses.

  1. The Order Lacked Proper Authorization

Some companies may hold paying for technology services by stating that the employee or representative who authorized it did not have the proper permission. All business organizations have well-stipulated procedures for decision making.

Technology affects all areas of business, and only C-level managers have the authority to approve purchase or subscription of search services. If the technology company did not meet the CEO, MD, or any other top manager, mid-level and junior managers would approve new IT solutions without seeking the authority of their bosses.

The topmost executives, mostly the managing director, CEO, and the business owner, control an organization’s finances. They must be aware of the automatic technology, how it functions, and buy into its value.

A contract between a client and the tech company that lacks approval from the senior-most office is valid but they will often still refuse payment. 

  1. Payment Renegotiation

Companies can sometimes delay payments to ask for a revision of prices based on the competitor’s prices. Typically, every technology company wants to retain loyal clients, so the administrators will listen to the client’s standpoint.

Inconsistency in the product performance may also spark price negotiations. If the IT services fail to meet the standards, the clients could ask to pay less than the earlier agreed amount since buyers want excellent returns on investment.

Sometimes the request is valid, and the company may agree to do so. But if the renegotiation is uncalled for, then the technology company has to follow up until the amount in the contract is fully paid. A debt collection agency can step in and help follow up using the facts in the agreement.

How Collection Agencies Accelerate Payments For Technology Companies

Do you have accumulated payments that you would like recovered fast? Debt collection agencies can benefit your organization by:

  • The collection agencies have the resources, time, and expertise needed to follow up on unpaid money
  • You will only pay for the debt collection after the company has successfully recovered the late debt
  • The collection agency can deal with the customer with default payment independently
  • Debt collection companies allow entrepreneurs to focus on growing their business and pursuing new deals instead of concentrating on the recovery of late payments
  • Collection agencies use legally trained staff and have connections to relevant supporting agents such as lawyers who can help solve official matters concerning late payments