Tips To Reduce Deductions And Disputes On Invoice Payments

 In Invoice Collections

Keep a close eye on your internal processes
Keep a close eye on your internal processes

In the case of defective goods, a return is obvious. When this happens, quality control, purchasing, sales, customer service and the credit department must all have good communication so that problems are minimized.

Sometimes, in the case of goods never received, the reason could be a case of internal theft. This kind of problem must be monitored closely with the involvement of management, especially if the complaints regarding non-receipt of goods are frequent. The shipping manager must look into the issue, and consider extra security to check shipments that leave the warehouse.

In fact, it is a good idea to have shipping and inventory managed separately to keep human errors at a minimum. A bar code system helps to maintain correct inventory and shipments. When there are short shipments on a regular basis, this must be brought to the attention of stop management so that the matter can be investigated.

In the case of service not rendered as per specifications or contract, the issue could be that the paperwork related to the job was not keyed into the system, or that materials for the job are not available. There could also be labor problems, cash flow problems, closure of business, or huge accounts receivables that have to be collected. Here, it makes sense to collect payments at periodical intervals at different stages of the job. At the time of order acceptance, arrangements must be in place to get the necessary materials for the job.

Another common cause for deductions and disputes is error in payment terms.  When customers take advantage of payment terms well beyond the date on which it is due, action must be taken to correct the issue. Any unauthorized discounts must be claimed back. If the customer is non-responsive, the account must be put on credit hold until matters are settled.

Deductions and disputes can lead to larger issues particularly if the customer or retailer is already embroiled in cash flow problems.  It is important for you to be alert to any signs of delinquency and quickly take steps to prevent accounts receivables from going out of line. This means keeping track of the customer’s financial position and their performance for indications of any problems. This also means that you need to ensure that your own business is following ethical practices.

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