How To Quickly Resolve A Payment Dispute
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 friendly and relaxed conversation regarding the payment dispute.
Facing the problem head-on is the key to getting the dispute resolved quickly and ensuring your cash flow isn’t affected.
Propose A Part-Payment
If you have still not received payment from the customer, even after following the points above, this is a good time to propose a “part-payment”.
Continually pushing for the full amount may create tension between yourself and the customer, so offering a part-payment proposal may help in keeping your relationship with them.
Proposing a part-payment will also indicate whether or not the customer has any intention in paying the invoice at all. This will help you financially also as money will be entering your bank account, regardless of if it’s the full amount or not.
Always Retain A Professional Manner
Every accounts department or credit control team has faced clients who tend to be nasty or insulting on the phone, especially if they’re unhappy with payments.
It’s vital to ensure you keep a professional tone and manner whilst dealing with clients on the phone as this is the only true way to resolve any issue.
If you maintain a calm and collected approach, regardless of how the client is acting, an amicable solution is sure to be achieved. Guaranteeing professionalism will make sure the relationship between you and the client is kept and any future transactions should (fingers crossed!) be hassle-free.
Federal Management Commercial Debt Collection
If, after taking our advice from this article, you’re still not having any luck with resolving a payment dispute then it’s time to speak to the experts.
At Federal Management, our expert team of trusted debt collectors are on hand to assist with any dispute enquiries by achieving unrivalled results whilst minimising the costs.
Some of the key benefits of using our UK No1 Commercial Debt Collection service is:
- UK’s Lowest Commission Rates From 6%
- Up to 90% Recovery Rate on Undisputed Debts
- Commercial Legal Team to deal with disputes and mediation
- No Collection means No Collection Costs to pay!
- Approved and Authorised by the FCA
Don’t hesitate to get in contact with our team now at www.federalmanagement.co.uk or give our sales team a call on 0333 043 4425.