Our Commercial Debt Recovery Solicitors look at the 5 main reasons why invoices are disputed and what steps you can take to resolve things

Late payment of invoices is a massive problem in the UK, with a survey by Liberis in 2018 showing that UK Small Businesses were owed a total of £14.9 billion in late payments. The average amount owed per firm was £11,000, and it’s getting worse. However, what happens when an invoice is not only overdue, but also disputed? In this article, our commercial debt recovery solicitors look at the 5 main reasons why invoices are disputed and how such disputes can be resolved.

Of course, you and your business can do everything right and still invoices are paid late and/or disputed – it’s a sad fact that some businesses will try almost anything to avoid paying. That’s when our experienced debt recovery solicitors can help: we’ve recovered £millions worth of overdue and disputed invoices in our 40 years in business.

  1. Reason One – Late Delivery

Goods and services can often be delivered late, for a variety of reasons, some of which might be unavoidable: machinery breakdowns, delivery problems due to bad weather or even administrative errors. Best practice, of course, is to ensure the up-front contract at the point of order is clear when it comes to how late deliveries are treated and that both parties agree. Likewise, if delivery is going to be late, always keep the customer fully informed and updated.

Importantly, unless there is an up-front agreement that includes a specific penalty clause for late delivery, then you are within your rights to insist that payment is made in full.

  1. Reason Two – There Was a Fault

Clearly if the products that were delivered were genuinely faulty, then the customer is within their rights to dispute the invoice and refuse to pay. If there was no up-front agreement about faulty goods, however, then you should take the opportunity to take the faulty goods back and replace them as the best way of resolving the dispute. Grey areas always exist, however. For example, if you know that some of the ‘faulty’ goods were used, then the implication is that they were good enough to be used and should be paid for – in full or in part.

  1. Reason Three – That’s Not What I Agreed To

In many ways this reason underpins all of the other reasons and the way to avoid it, as far as possible, is to have a legally drafted set of terms and conditions that is signed by your customers when they purchase goods and services from you. In this way, if an invoice is disputed you and your customer know exactly what was agreed.

In our experience, it is not always the case that such terms and conditions exist. Typically the smaller the business, the more likely it is that terms and conditions of sale do not exist.

  1. Reason Four – The Service was Poor Quality

This is a very common reason for disputed invoices. Sometimes it is true. Other times it is a classic delaying tactic to avoid paying on time. One key issue here is whether or not the services provided produced the results the customer expected. In such an instance, unless the order was clearly made on the basis of results, you are within your rights to remind the customer that your contract was to provide a service and not results.

Inevitably, business isn’t always as simple as this, so it’s always worth seeing if you can discuss things and reach a negotiated settlement that suits both parties. Unless of course it is just an attempt to delay payment, in which case contact our commercial debt recovery solicitors.

  1. Reason 5 – Can’t Pay! or Doesn’t want to pay!

This happens frequently. Everything has gone to plan, from the placing of the order and the signing of the Ts and Cs, to on time delivery. Then the invoice is issued, and it isn’t paid. You follow up and finally you find out that the customer simply doesn’t have the funds available to pay right now.

Alternatively, it could be that your debtor is avoiding paying your account for no-other reason that they do not want to pay. Immediate action is required!

It is worth remembering that once an order is placed, a contract signed and/or terms and conditioned agreed to, then the customer is legally obliged to pay you. Not being able to pay does not constitute a dispute, and once payment is late, you have a legal right to pursue payment and also add interest and recovery costs.

Once again, if payment is not made, that’s when we come in.

Talk to our Commercial Debt Recovery Solicitors About Disputed Invoices

Most late/overdue invoices are settled quickly through the issuing of a solicitors’ letter before action. However, when an invoice is disputed, then that is the time to contact our commercial debt recovery solicitors. We are experienced in using the right and most effective legal action to resolve the dispute and achieve a good outcome. Options range from alternative dispute resolution to litigation through the courts.

Founded in 1978 we are the UK’s longest established specialist firm of commercial debt recovery solicitors with a strong track record of recovering what is owed to our clients. Take a look at some of our testimonials. If you have a disputed debt, than the sooner you talk to us the more we can do to help.