Avoiding an A/R Dispute

27 Sep

Avoiding an accounts receivable dispute is best met with a proactive approach so you don’t have them in the first place! By making it a habit to confirm a few pieces of information with every client right from the start, you can reduce the number of disputes.

Start by thoroughly covering your policies with new clients. Make sure they understand your credit terms. When shipments are made, make a call to confirm that it arrived. Ask about the quality of the product, the timeliness of delivery and the accuracy of the invoice especially for first time customers or for large balances. By doing this, you eliminate the possibility of a late dispute, which is likely nothing more than a stall.

Another pre-emptive move on your part is to require written purchase orders. PO’s help keep the details straight and tend to eliminate errors, serving as one more checkpoint in writing. Since everything is spelled out on that one form, any disputes that arise may be more easily resolved.

In the event of a dispute

Disputes that are brought to your attention early are most likely to be valid ones. In order to come to a resolution, listen intently before you respond. Maybe your customer has a legitimate issue, maybe not. But you won’t know if you don’t hear them out. Sometimes a dispute is simply a stall tactic. If you suspect this is the case, you may want to focus on getting the undisputed portion paid, especially if it appears you’ll have some significant sorting out to do for the disputed portion.

A resolution may encompass a payment modification and that’s great if it works for you. Just make sure you thoroughly explain your accounts receivable policies so you can avoid any future disputes and past due bills.

Avoiding an A/R Dispute In the end, most disputes are headed off at the pass by a simple follow up phone call once the goods are delivered. That alone is likely to prompt timely payment as your customer sees how seriously you take your business and how you value his/hers.

Leave a Reply

Your email address will not be published.