How To Quickly Resolve A Payment Dispute

During normal business to business relationships, it is common practice to set out payment terms before any work is completed.

“Payment Terms” refers to the number of days following any completed works in which the invoice must be paid. These are usually set out in a contract so that both parties know when they will be paid/when to pay in case any issues arise.

Usually, payment terms are based on a 30-day time-frame but may be altered to 60 or even 90 days depending on the relationship and trust between the two companies.

Payments are normally completed on time and without issue. However, there are times when difficulties arise through the client disputing an invoice and refusing to pay on time, or at all.

There are various reasons why a client may dispute an invoice, including:

• A mistake on the invoice such as, for example, a wrong address.
• Disagreement with the price.
• Claims that the original work was never carried out.
• Unable to pay due to financial difficulties.

Dealing with payment disputes in today’s economic climate, where commercial cash flow is important, can be very stressful.

It’s knowing how to deal with disputes in a calm and collective manner that is important. This will ensure no extra stress is put on yourself which could potentially ruin a relationship with the client if handled unprofessionally.

What You Should Do When Clients Wish to Dispute the Payment

Our debt collection experts have created a list of five key tips to ensure a quick resolution of a payment dispute that will ensure professionalism throughout the whole process.

Gather and Prepare All Relevant Documents

The first step to ensuring a payment dispute is resolved quickly and efficiently is to gather all necessary documents related to the particular debt. These will serve as evidence during the resolution process.

These documents could be anything from correspondence between both parties, proofs (purchase orders, invoices, or schedule of works) and anything else that may prove useful.

The payment dispute will be resolved quickly if you prepare correctly, so it’s imperative to have as much information as possible at your disposal.

If you find that disputes on payments or invoices are becoming a regular thing from more than one client, it’s best to find out who the best person to speak to is. This will ensure no time is wasted in the dispute process.

Identify Who Is Going To Pay Your Invoice

It’s a common occurrence during any payment dispute that the person who makes the dispute isn’t actually the person who pays the invoice.

The best, and only, person to speak to in the case of a payment dispute is the person who is in charge of paying the invoice.

This could be anyone from an account manager to a finance director so it’s recommended to find this out at the start as to cause no further communication issues.

Don’t Be Afraid To Confront The Customer

Most invoice disputes can (and should) be handled by means of simple communication with the customer. This can feel like a daunting task, however, as there is a fear of upsetting the customer or damaging a relationship based on the nature of the conversation.

It is never easy asking someone for money but when an invoice is overdue or being disputed, this is appropriate grounds to chase for payment.

Once the person who’s paying for the invoice has been identified, it’s worth getting in contact with them to have a <