This is a series of Q & A interviews with Nicki Kinton of NK Credit Consultancy in which PPD is looking at the typical excuses that suppliers often hear when chasing late payments, and asking Nicki how best to handle them.


Excuse #7 – I dispute the payment


What does this usually mean? That the amount is disputed or that the entire premise of the invoice/payment is disputed?

This is vague enough to mean anything! In my experience it’s most likely to mean one of the following:

  1. A pricing dispute
  2. A quality dispute
  3. A delivery dispute


This excuse sounds like a delaying tactic to tie up the supplier in a dispute while delaying payment. Is that often true?

Pricing and delivery disputes are more often genuine, though not always in the customer’s favor. Usually, there has been some misunderstanding over the price quoted, perhaps your pricing is on a sliding scale tied to quantity and the customer has ordered a different quantity than usual. Or you may have recently introduced price changes which have not been updated in your customers’ systems.

It may, however, be an error on the invoice. This often occurs when your customer is on non-standard pricing tariff and you accidentally use the standard pricing on the invoice, or a promised discount hasn’t been applied.

There’s much that can go wrong with delivery from incorrect quantity delivered to damaged goods or a dispute over the delivery charge.

However, disputes over quality can be quite subjective, particularly with services, and are often a delaying tactic.


Presumably the presence of a solid paper trail is vital in resolving issues like this?

Most definitely. Quotes should be sent in writing and acceptance should be received in writing, even if this is done with an email confirmation following a verbal quote and acceptance.

If the query has arisen because of a pricing change, having a document trail of when and who was informed of the changes helps to resolve the issue quickly.

Delivery notes should all be linked to an invoice and all deliveries should be signed for. Where possible goods should be inspected before accepting a signature, not so easy to control if you’re using a third-party delivery service.

Your terms and conditions should be very clear about quality and what the customer has a right to expect from you.


How often do these kinds of dispute end up in legal action?

Very few in my experience. Possibly because of the desire to maintain goodwill, particularly in the case of pricing or delivery queries.


In your experience what are the best ways to resolve this kind of dispute without a major falling out?

Most importantly, investigate each query and act on it quickly. If the same sort of query is occurring regularly revisit your processes and controls to see what needs to be done to stop it happening in the future.

Have a transparent dispute resolution process, which include timeframes and keep the customer updated regularly with the investigation.

Prevention is always better than cure!

Always be open and honest with your pricing. If you are giving estimates instead of quotes be sure to be very clear with your customer the basis on which you have to provide the estimate and the likelihood of, and possible reasons why the actual costs could be more than the estimate. Keep your customer informed at all times of issues likely to affect the cost.

Be clear in your communications with customers about your prices; are they inclusive or exclusive of VAT, what other costs may be involved (e.g. delivery charges), are they subject to change and under what circumstances?

Set expectations regarding quality within your Terms & Conditions and communicate regularly with your customers so that any quality issues are picked up quickly and not left unidentified until it’s time to pay.

If you do everything you can to resolve a dispute fairly and equitably the relationship with your customers should remain intact and may even improve if they see you to be delivering great customer service under testing circumstances.


NK Credit Consultancy Ltd offers a complete credit management solution for your business covering all the core competencies including due diligence / designing credit policies / designing terms of business / improving the accounts receivable process / ensuring compliance with consumer credit regulation and Credit Insurance Policy / establishing reasonable credit limits and payment terms and more. To contact Nicki click here.