Whether you are a small business, a start-up, or you are already on the top of the success ladder, chances are you will have to deal with unhappy customers, unpaid invoices or a payment dispute.
And as we enter uncertain times yet again with the sharp rise in inflation, the sad fact is that we will see a lot more payment disputes as everyone tightens their purse strings.
This is difficult, especially if you’re a one-person business or freelancer and someone doesn’t pay you. You were not prepared for that to happen, and you take it personally, which is completely understandable. Rule number one: never bring emotion into payment disputes, as it will only hinder you if things end up in Court.
Can you prevent disputes over payments? Yes, you can certainly take steps to minimise that risk. In this blog, we give you seven tips on how to prevent and successfully resolve disputes over payments.
Check your Terms and Conditions
You can prevent disputes over payments when reviewing your terms and conditions regularly. If you are selling goods/services, make sure they are clearly defined. You should also pay attention to the time limit you have set out in the terms and conditions and how much time clients have to open a dispute after they’ve received the goods/services.
Ask for part payment
When dealing with a customer who doesn’t want to pay and disputes part of the invoice, you should ask for part payment. If only a proportion of the invoice is in dispute, try to get payment for the undisputed amount before you start to resolve the disputed sum.
Speak to the right person, and on the phone!
When a payment dispute arises, make sure you are communicating with the person paying the invoice. This way, you are speeding up the process to resolve the dispute. It’s also important you are not afraid to confront the client on the telephone. It’s so easy to ignore emails, but if you’re speaking to someone on the phone, they can’t ignore the situation.
Remain professional
Payment disputes can get pretty frustrating. But it’s important to remain professional in order to maintain your relationship and reputation. Regardless of the client’s attitude and behaviour, you should be friendly and objective yet firm. Know where you stand by being prepared with all the necessary hard facts the client can’t ignore.
Hire an accountant
If you don’t already have an accountant, you should think of hiring one. Why? They will have lots of hints and tips about how to avoid payment disputes. They will also implement the proper software to ensure you get paid in full and on time. We work with a really awesome accountant so if you’re ever stuck then head on over to Swift Accounting and Bookkeeping Services and speak to Kieran.
Let the client know the cost from the start
This is a very simple tip, one everyone selling products/services should practice. Before sending an invoice, make sure the client understands what is the cost of the product/service they are getting and you have an agreement in writing. This way, you have proof that they agreed to the cost of your products/services.
Have a consistent invoice chasing process
You look at your diary and realise that a client hasn’t paid an invoice by it’s due date. The invoice is now seven days late and you must chase it, this is the part of owning a business that you didn’t sign up for. You open a new message in your emails and type something out and delete it several times because you don’t know what you are saying sounds right, you aren’t even sure what you should be mentioning when you first bring up the late payment. We have designed email templates for invoice chasing so you can feel confident that you are taking the right steps whilst chasing any late payers.
Having canned invoice chasing emails in this respect can be hugely helpful and free up your time. We have therefore simplified it for you and given you the suggested wording. This involves 3 emails being sent out over a period of time with each one stressing the urgency a little more. The final email includes interest payments and a warning of further steps being taken i.e., legal action.
Final thoughts
If you are still unsure how to proceed with payment disputes, feel free to reach out. We can assist with advice in relation to payment disputes, how to successfully resolve them and how to deal with them if they occur.