0800 9774848

Blog

5 common invoice disputes and how to handle them

31/07/2019 / Comments 0

Dealing with invoice disputes can be time-consuming, frustrating and worrying, especially when your business is depending on payment to keep moving forward.

When it comes to invoice disputes, the best thing to do is try to avoid them in the first place (and there are a few ways you can do this), but despite your best efforts you may still find yourself having to resolve a dispute from time to time.

In some cases, disputing the invoice could be a way for your client to avoid or delay paying, but for the most part there is a simple solution that will keep your client happy and get you paid.

The first thing to do is reach out to the company directly. It’s best if you check in with the company when you send your invoice (to confirm they have received it) and then a few days later to ensure they are happy and there are no disputes.

That way, if there are any problems you can try and get to the bottom of them early to avoid the invoice becoming overdue and the pressure surrounding the situation to increase.

When you do encounter an unexpected dispute, it can be hard to know the most appropriate response and what your rights are to insist on payment.

There are several best practice tips for solving disputes, but every situation is different, and knowing the relevant information to gather and options available can go a long way to getting things resolved.

Here are 5 of the most common disputes you might encounter and how to deal with them.

Unsatisfactory work

If a customer is claiming that the work you have provided for them is unsatisfactory, it’s important to ask for details. Is the work unfit for purpose, or does it simply differ from what the client had in mind?

If the customer has claimed the work is unfit for purpose, ask for evidence that supports this and, if necessary, the chance to rectify it.

If the work you did was satisfactory, but the client didn’t get the desired results from the project, reference your contract. Chances are you aren’t responsible for delivering results, but simply the service, and you have the right to be paid for that work.

If the client simply had a different vision about what the end result would look like, offer to make some revisions. These are often built into your contract, but make sure it is clear the number of revisions you are willing to make or you could end up going back and forth for a long time.

If the first you hear of a client being unhappy with your work is when you begin chasing payment, you may be suspicious about their motives.

Remain calm and try to find out more information about their claims. If the client refuses to agree to a solution, give you details of what they are unhappy with or give you the chance to fix any issues, you may have to turn to a professional agency to help you retrieve payment.

Faulty goods

A client may claim that goods are damaged, faulty or not fit for service. The first thing to do is establish the fault and ask for proof.

If there is a genuine issue with the goods, the client may be happy to return them and receive a replacement.

If they aren’t happy to have them replaced, it is still worthwhile asking them to return them to you so that you can check the fault and ensure that it isn’t an issue that could affect more of your products.

The client may claim that there was an issue, but they had to go ahead and use the product anyway. Ask for details and evidence of the condition, and if it’s genuine it could be worthwhile offering a discount as a gesture of goodwill.

Again, if the first you’ve heard of the problem comes when it’s time to pay, gently push the client for evidence.

Late delivery

Unless there is something in your contract around late delivery penalties, you are within your rights to insist on payment in full here.

If there was an issue at your end that caused a delay, or you wish to work with this client again in the future, it may be worth negotiating a discount to keep both parties happy.

If you provided non-perishable goods to the customer that they were unable to use due to the delay, you may consider offering the chance for the customer to return the goods and pay a re-stocking charge.

Wasn’t aware / Never agreed

When a customer claims they were unaware of certain costs or never agreed to pay the value, it can be particularly frustrating to navigate.

Any time you begin a project, you should always make sure you have a clear contract that states charges and requirements, even if you’re working with a customer that you’ve dealt with before.

Direct them back to the contract and make it clear that based on the terms laid out you do expect payment. You can ask them if there are any areas they would like you to go over with them to reassure them about the invoice.

If you do not have a contract, look for a paper trail that clearly states what was agreed and with whom.

It may just be that you made your original agreements with a different member of the team and the message hasn’t been passed on. CC your original contact into all communication, provide evidence of the agreement and make it clear that you still expect to be paid in full.

Unable to pay

It could be that your client’s situation has changed since the original agreement was made and they’ve found themselves unable to pay your invoice.

Although this can be frustrating, particularly when you were depending on the money, it’s best to be understanding at first in this scenario to try and ensure the best outcome for your business.

Make it clear that your client is obligated to pay the full amount, but that you’re willing to negotiate a way to help them.

Discuss the reason they’re unable to pay. It may be that they are waiting for payment themselves that has left them low on cash. Be sure to take a date that they expect to have the money or at least an update so that you can chase it then.

You can also ask how much of the invoice they are short by and arrange for them to pay what they can now and the rest at an agreed later date.

Being slightly flexible should help you build a better relationship with your client and lead to a more positive outcome in the end.

Are you struggling to collect payment on an invoice? Contact us today on 0800 9774848 or collections@hiltonbaird.co.uk to see how we could help.

 

Comments

No comments yet - be the first!

Just some of our clients

  • Santander Corporate & Commercial
  • Wupwoo
  • Royal Bank of Scotland
  • Close Brothers Invoice Finance
  • BNP Paribas
  • Barclays
  • Duff & Phelps
  • Leonard Curtis
  • Construction Recruitment Services
  • FRP Advisory
  • Harrisons Business Recovery
  • Smith & Williamson
  • Custom Glass
  • Leumi ABL
  • PNC Business Credit
  • Eazipay
  • SER Contractor
  • Quantuma
  • Kreston Reeves
  • Wote Street People
  • Midland Rock

Authorised and Regulated by the Financial Conduct Authority

Our website uses cookies. For more information about managing cookies, visit our Privacy and Cookie Policy. Continue