It would be normal to think that invoices are generally disputed by customers on the grounds of some legitimate technical reason but the act of disputing an invoice has wider ramifications for the supplier.


Going to court should always be the option of last resort but part of the process leading up to an appearance in court involves the issuing of a statutory demand.

As David Walker from Cashflow Rescue points out in our second interview with him, a statutory demand is:

“…a final step before a winding up petition is drafted and served on the client. It is a single form and there are no fees to pay. However, you can only send it in certain circumstances.” 


“…the debt must be undisputed. If it is a disputed debt, even if the reasons for disputing it would never win in court, you cannot serve a statutory demand.”


Statutory demands are effective because the recipient will most likely know, or shortly find out, that the next step is for the debtor company or individual to be declared bankrupt.

As such disputing an invoice could be used as a blocking tactic by a savvy and unscrupulous customer. Sadly, according to David, this is not uncommon however he has developed strategies to deal with this kind of situation.


All that said it would be preferable to avoid having disputed invoices in the first instance.

Knowing if a customer that you are about to do business with has, in the past, disputed an invoice can help you prepare for such an eventuality.

In every rating made on The Prompt Payment Directory, contributors are asked if the invoice has been disputed or not. To avoid the possibility of having invoices disputed, suppliers can take the following steps:

  • Make sure you know exactly what information is must be displayed on the invoice.
  • Make sure you know who the invoice should be sent to and in what format.
  • Make sure you know exactly when the invoice should be sent.
  • Make sure there are no spelling errors.
  • Make sure you have the customer’s address and contact details correctly displayed on the invoice.
  • Make sure you have not forgotten to include the purchase order if one was supplied.
  • If possible make sure the goods or services you have supplied have been signed off by the customer.
  • In advance of doing the work or delivering the goods make sure you know exactly what is expected in order for the job to be considered complete by the customer. If possible have this agreed upon either in the body of the contract or in an appended clause.
  • Make sure you know who is supposed to sign off on the completed goods or services.

These are not just exercises in covering your back, they’re good housekeeping. Larger organisations have complex systems in place for managing cashflow and minor slips-ups can cause invoices to get caught up in them.

Above all, get to know your customer and do your due diligence in advance of going into business.