How To Handle Invoice Disputes
Is your customer refusing to pay?
Are they claiming that their invoice is incorrect?
How should you handle invoice disputes?
Organizations can be stopped in their tracks by customers disputing charges. Can a customer just dispute a charge and not pay? What happens next? How can you to make sure you can collect on an invoice and handle invoice disputes?
First, here are some questions to consider when deciding how to handle an invoice dispute:
- Did the customer proactively contact you, or did you have to contact them for payment?
- Was the invoice past due before the dispute began, or did the customer dispute the charges with a customer service representative right away?
- Did the dispute arise from damaged goods? Does the customer have a picture of the damaged goods? Did the goods come directly from the manufacturer or through a distributor, which might create different limits on the timeframe to resolve a dispute?
- Did the customer complain about a failure to deliver on the contract? Is this documented?
Set The Expectations for an Invoice Dispute
You can set the tone for the call by setting up proper expectations. Don’t give in to their delay tactics. Offer to investigate their dispute but make it clear that you don’t tolerate disputes made after the payment due date. To research the dispute, tell them that their payment must be processed first. Then, if their dispute is valid, their payment can be credited back to them. Remind them that in the future, if they have a dispute, they must notify you before the payment due date. This scenario assures that your payment won’t be delayed and that customers can’t use delay tactics, by putting the responsibility of communicating a problem on the customer.
Prevent Invoice Disputes
Here are some steps to add to your billing system and customer communications that can help prevent invoice disputes:
- Run a credit check on the customer – You might find this stalling is a symptom of a much bigger credit issue that must be addressed.
- Review unpaid invoices several times a year – Note which customers have notified you about invoice disputes and how many have filed disputes properly.
- Be clear and upfront about policies – This way, old and new customers won’t be able to bend the rules.
Debt Collection Agency Michigan
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Ross, Stuart & Dawson can help identify the gaps and weaknesses in your credit risk management system and help you implement the right credit tools, procedures, and improvements that will fulfill your credit risk and debt collection goals.
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