As a business owner, the most common problems you’ll face are dealing with disputed invoices and delayed payments. These issues not only take up your credit controller’s time, but it also hinders your cash flow significantly. For most companies, however, invoice disputes and late payments are inevitable. That’s why it’s important for you to be prepared whenever these problems arise to promote a healthy cash flow and ensure that your business is continually growing.
To help avoid invoice disputes with your customers, it’s important to tackle the problem with a bold yet assertive approach. Here we’ve compiled 5 tips that’ll help prevent these problems and hopefully resolve any outstanding invoices.
5 tips to follow to avoid invoice disputes
1. Take a look at your invoice template.
The first step in avoiding an invoice dispute is by examining your invoice carefully before you send it. Is the invoice addressed to the right person? Are the terms and conditions clear within your invoice? These little details matter because even the smallest misinformation can cause confusion and eventually lead to a dispute. If there are any errors on the invoice, make sure to revise it and send a new invoice to your customer
Make sure that the products/services provided are clearly stated and broken down so that your customer can understand what the invoice is about. Having concise information in your invoice can go a long way in collecting payments from clients.
2. Stick to the original invoice amount.
Your customer won’t be too pleased if they receive an invoice with additional costs that aren’t included in the original invoice amount. This can ultimately lead to delayed payments since they’ll understandably query your invoice. Before placing additional charges, make sure that any increases to the original amount have been fully discussed before you send the invoice. This will make the invoice clear for both parties which can help avoid conflict.
If a part of the invoice is being disputed, ensure that the remaining invoice is paid off and discuss a solution with your client. This allows you to secure a portion of the invoice while waiting for the disputed part to be paid.
3. Make a courtesy call.
If you’re unsure of where to address the invoice to, you can always call your customer and ask where the invoice should be sent. Not only will this help you send the invoice to the right person, but it’ll also serve as a reminder to the customer about their unsettled payments. Make sure to give a call after the invoice has been sent to confirm if your customer has received it. Remember to be calm and collected with your approach when making a phone call to your customer to avoid unwanted disputes that could delay the payment process.
4. Set a time limit in your terms and conditions.
Setting a limit on disputes allows you to correct any errors within the invoice as well as settling the dispute in advance of its due date. To do this, state a time limit on when your customer can raise a dispute, preferably within the first week after receiving the invoice. This method also protects you from customers who use invoice disputes to delay their payments.
5. Practice a good credit control procedure.
Practicing a good credit control procedure limits your exposure to bad debts while encouraging your customers to buy on credit. The best way to do this is by finding a reliable credit information partner that will provide you with valuable insights to help you make smarter credit choices.
If you’ve given all your efforts and the invoices are still unsettled, you can opt for the services of a debt collection agency. This saves you valuable time, money, and energy from having to deal with bad clients who owe you money. Outsourcing your late payments will help give you peace of mind and allow you to focus on other important matters without wasting valuable resources.
Conclusion
Nowadays, invoice disputes are a common problem for most businesses. But that doesn’t mean that you should settle for unpaid invoices. These steps will help provide an effective solution in terms of collecting delayed payments while avoiding invoice disputes. And if it ever gets too complicated for you, don’t hesitate to outsource it to a debt collection agency to help resolve the problem.
