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How to avoid an invoice dispute


Anyone that has ever experienced a payment dispute will know that, most often, it starts with the invoice issued to the customer.

As a business, having a payment delayed and disputed will not only take up your credit controller’s time, but it will directly restrict your cash flow. If this dispute is joined by others, the problem multiplies and causes unnecessary headache, leading to unexpected cash flow gaps that could put your business in danger.

To ensure this doesn’t happen, here are 6 handy tips to avoid conflict by taking some simple proactive and preventative steps. The great thing is this will take a fraction of the time needed to chase late payment and resolve disputes.

1. Examine your invoice template

Here, you’re looking for simplicity. Are all the elements clear? Is the invoice addressed to the right person, decimal point in the right place (sounds silly, but it happens!) and the terms clearly stated? Does it clearly explain the products and services provided – and can they be broken down for extra clarity? Having these prominent and clearly instructive among other elements will yield a better chance of timely payment. For more pointers and handy tips on how to write the perfect invoice, click here.

2. Double check

Everyone makes mistakes. It’s easy to do, but it’s also easy to correct provided you double check your invoices before they are sent to your customers. An extra couple of minutes’ fact-checking figures and addresses will avoid a delay in payment of days and sometimes weeks.

3. Stick to your original quoted amount

If your customer receives an invoice with additional costs added from the previous quoted amount, they may understandably wish to query this, which will delay payment to the business. These sorts of surprises usually aren’t well received, so make sure any increases to the quoted price have been explained and agreed before the invoice is sent.

4. Make a courtesy call

Not sure where to send the invoice or who to address it to? Calling your customer to ask this information will not only benefit you, but it will also serve as a gentle reminder that the invoice is on its way. Always be sure to call again after the invoice has been sent to check whether the invoice has been received – and crucially that everything’s in order. This call can act as a gentle reminder also, leaving your invoice at the forefront of the customer’s mind. Here’s what you should be covering in your courtesy call.

5. Set a time limit on disputes in your terms and conditions

To ensure any disputes are raised nice and early, state in your terms and conditions that disputes can only be raised within, for instance, the first week after receiving the invoice. This will give you plenty of time to rectify any errors or settle the dispute well in advance of the invoice’s due date, also protecting you from customers who use disputes as a stalling tactic.

6. Stick to a good credit control procedure

If you haven’t yet got one of these, a credit control policy will ensure all situations are handled in a similar manner and dealt with effectively to ensure payments do not become or remain overdue. Keeping in regular contact with the customer throughout the credit period is important, giving them ample opportunity to make any queries regarding the invoice. For more information about how to write a great credit control policy, click here.

Help! My invoice is still disputed…

If you find that, despite taking all of these steps, your invoice is still being disputed, investigate why the dispute exists immediately. Once you have a firm grasp of this, consider the reasoning behind the dispute before deciding which route of action to take.

It is important to recognise that disputes are extremely common nowadays and consuming an even greater amount of credit control resource. The important thing is to establish as quickly as possible whether it’s a genuine dispute, a stalling tactic or an error on your part.

If the job of credit controller ever becomes too big for an in-house department, there are experienced external agencies who can handle your business’s credit control function efficiently, so you don’t have to worry. If you are considering this, click here to read the pros and cons of both in-house and outsourced credit control.

At Hilton-Baird Collection Services, we are proud to have helped a number of clients achieve a healthy and reliable cash flow by improving their collections function. If you would like to know more about how we could help your business today through our dedicated credit control and debt collection services, our friendly team can be reached on 0800 9774848, or emailed at collections@hiltonbaird.co.uk.


Just some of our clients

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

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