Debt Collection and Payment Dispute
Debt Collection: Handling a Payment Dispute in 5 simple steps
It is a sad fact of business life that from time to time you will be faced by a customer who disputes an invoice. The cause of the dispute can range from an allegation of a mistake contained in the invoice to a simple disagreement over the price. Whatever the cause, a payment dispute can delay your reimbursement, leading to cash flow and other problems.
So how do you deal with such a scenario? Naturally, you want to have your invoice paid as soon as possible. At the same time, you don’t want to unnecessarily damage your relationship with the customer, which could put future business at risk. As an experienced debt collection agency, we regularly deal with payment disputes and advise that a five-step process can help.
1. Be Prepared
Preparation is important in many areas of business, and it is vital to dealing with any payment dispute. Make sure that, before you get into discussing the detail of the dispute, you gather together all relevant documentation, including delivery notes, invoices, receipts and purchase orders, to ensure that you have all the facts to hand from the start.
2. Speak to the Right Person
When negotiating over a payment dispute, you don’t want to waste time talking to someone who doesn’t have responsibility for paying your invoice. Making sure that you are speaking to the right person can save time and frustration, both of which can mount up if you have multiple disputed payments and have to spend time speaking to multiple people.
3. Raise the Issue Clearly and Politely
Discussing a payment dispute with a customer can be a little daunting, not least because as a business owner, you will be trying to balance two priorities: getting paid and retaining a customer for future business. It is natural to be apprehensive in this scenario, but in our experience, the majority of disputes can be resolved through courteous and friendly conversation, and that if the issue is raised in this way early on, it is more likely to be resolved to everyone’s satisfaction.
4. Consider Offering Part Payment
One option to consider while discussing a disputed payment is to offer a part-payment. This can be particularly useful in cases where customers are only disputing a part of the invoice. In this case, pushing for the full payment could be counter-productive and cause further delay. A part-payment offer can also tell you whether the customer is serious about their payment dispute, and can provide reassurance that the payment dispute is not an attempt to avoid paying the whole invoice.
5. Stay Professional
We have found most payment disputes can be dealt with through friendly conversation. Unfortunately, from time to time this will not be the case, and a dispute may turn hostile. In this scenario, as well as having the information at your fingertips, it can be effective to remain calm, professional and firm in your conversations with the customer. This not only improves your chances of quicker payment, it portrays you and your company in a serious and professional light and increases the likelihood of maintaining a future relationship with the customer.
Make Use of Feedback
Although payment disputes can be concerning, like so many experiences in business life, they can also be positive. Reflecting on how a payment dispute arose will involve you looking at the transaction from the customer’s perspective, which could in turn lead to awareness of potential weak points in your business processes, and their potential solutions, from improving staff training and awareness to streamlining or revamping your customer-facing operations.
Call on the Professionals
If you find that you can’t resolve a payment dispute despite following these steps or you simply want some advice on unpaid invoices, debt collection or recovery, get in touch with us today. Our team of highly trained staff can help you to secure that disputed payment in a professional and timely fashion, ensuring that you can continue to do business with your customers. Please also check our debt collection guide for businesses.