Have you issued an invoice that has been disputed? What should you do now?

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Your customer is refusing to pay your invoice- what do you do next?

Late payment of invoices is often considered part and parcel of running a business but are you finding that your invoices are being delayed due to a dispute being raised?

We have previously written some top tips to help avoid delays in your invoices being paid at  https://www.debtfast.co.uk/blog/2018/05/debt-recovery-top-tips-help-avoid-invoices-not-paid/. We are seeing more and more companies contacting us because of disputes on invoices as opposed to the more common late payment.

In a world where cash is king, disputes can cause lengthy delays in obtaining payment of your invoices which can result in cash flow difficulties.  We often are contacted by prospective new clients once they have exhausted their efforts to resolve a dispute and in some instances months have lapsed since the original invoice was rendered.  We are often approached at the stage where the business can no longer sustain the non-payment and collection of the invoice becomes time critical.

Some common reasons for an invoice being disputed are:

  • Faulty goods
  • Poor service
  • Lack of funds to pay resulting in a dispute being raised to delay payment
  • Goods not being received or being received late
  • The cost

Sometimes the dispute is genuine but on occasion it is used to delay payment of an overdue invoice. There are certain things that are within your control to minimise disputes being raised to include:-

  • Having a signed written contract in place
  • Ensuring that the scope of the order for goods or service has been confirmed in advance
  • Ensure the order has been signed off/agreed by the appropriate person with authority

Dealing with disputes is frustrating for many reasons and once a dispute is raised you are under threat of not getting paid in full for the work or goods.  It is important to always keep in mind that some disputes are genuine expressions of dissatisfaction and to treat a customer as if they are simply trying to get out of payment or receive a reduction is a sure fire way of losing customers.

Whilst all efforts should be made to resolve a dispute to the satisfaction of your client, you need to balance this with ensuring that the dispute is resolved in a timely manner.  Often the longer disputes are left unresolved, the more each party becomes entrenched in their position.  Drawing a line at which point you will escalate an unpaid account to a third party is essential, whether that be 30 days, 45 days or another timeframe that you decide.  At this point if you have not resolved a dispute yourself it is likely that third party intervention is needed.  Independent intervention from a company that has experience in resolving disputes is the best solution.  If negotiation still does not result in an amicable resolution then they will be able to advise you on legal options open to you to recover the debt owed.

If you need to discuss on a no obligation basis any invoices that are currently subject to a dispute, please contact Penny Daisley at ped@debenhamsottaway.co.uk or telephone 01727 738246.