How can you handle invoice disputes with high-value clients?

Where AP portals are becoming increasingly common it’s vital to check that the invoices have been uploaded to the portal and is therefore in the AP workflow to be paid.

Conduct a Thorough Invoice Review: Examine the disputed invoice in detail to identify any potential errors or misunderstandings. Analyze Communication Records: Review previous communications with the client to uncover any discrepancies in expectations or agreements. Assess Service Delivery: Evaluate if there were any deviations in the scope, quality, or timeline of the services provided. Client Feedback Analysis: Seek specific feedback from the client to understand their perspective and reasons for the dispute. Payment History Check: Review the client's payment history to determine if delayed payments are a recurring issue or a one-time event.

Approach with Respect and Empathy: Initiate the conversation with a respectful and empathetic tone, avoiding assumptions about the client's intentions. Use Factual and Objective Language: Clearly explain your perspective using objective, factual language, steering clear of emotional or accusatory tones. Present Supporting Documentation: Provide relevant evidence such as contracts, invoices, receipts, or work samples to substantiate your claims. Encourage Client's Perspective: Invite the client to share their reasons for the dispute, showing genuine interest in understanding their concerns. Active Listening: Listen to the client’s feedback, demonstrating that you value their viewpoint and are committed to finding a resolution.

Assess the Dispute's Nature: Evaluate the seriousness and specifics of the dispute to determine an appropriate negotiation approach. Be Open to Compromise: Consider offering concessions like a discount, partial payment, revised service, or a payment plan, where reasonable. Uphold Your Value and Rights: Stand firm on your business's value and rights, avoiding acceptance of unfair or unreasonable terms. Aim for Mutual Satisfaction: Strive to find a middle ground that meets both your business needs and the client’s expectations. Document the Agreed Solution: Ensure any negotiated agreement is clearly documented and acknowledged by both parties to avoid future misunderstandings.

Clarify Service Terms in Writing: Ensure all service terms, , are explicitly agreed upon in writing before beginning any work. Maintain Regular Communication: Keep ongoing communication with the client throughout the project to prevent misunderstandings and provide updates. Utilize Online Invoicing Tools: Implement online invoicing tools or software for efficient, trackable, and manageable invoicing and payment processes. Proactive Invoice Follow-Up: Send invoices promptly and follow up with the client both before and after the payment due date. Establish a Clear Dispute Policy: Develop and communicate a clear policy for handling invoice disputes, making it known to clients in advance.

One of the learnings related to this issue which is often overlooked is to have a formal standard operating practice in place. Usually invoice disputes happen when reconciliations are not frequent with key account/customer and internally as well i.e. between the AR and warehouse and inventory. A simple yet effective solution is to have frequent communication between sales, customer and AR team and ensuring all the delivered products are having supporting documents/receiving from customer, once this leg is established invoicing is to be done timely with supportive documents. Sometimes incentive/commission or margin payables are netted of by customer, this can be addressed by having periodic customer confirmations.

Thorough Contractual Agreements Customized Service Approach Transparent Pricing Model Regular Performance Reviews Client Education and Onboarding Flexibility in Service Adaptation Effective Risk Management Strategies Strong Relationship Building Feedback Mechanisms and Responsiveness Dispute Resolution Protocols Proactive Issue Identification Cultural and Communication Sensitivity Client Expectation Management Professional Liability Insurance Continuous Improvement Process