Adjusting your collections
5. Adjust your collections to the dispute handling progress
Most of your collections activities regarding disputed invoices will have to wait until the disputes are settled. After successful resolutions, the affected invoices will get new due dates. These are often part of the dispute resolutions. In most cases, they are the dates when the disputes are resolved.
If the disputes are found to be baseless, you can resume all your collections activities immediately. If the invoices are already overdue, you may also apply late payment charges, depending on your original payment terms and the legislation of your customer's countries.
If a dispute is proven and goes into the dispute handling process, the most you can get with collections at this point is a promise to pay as soon as the dispute is settled. You can either make a phone call or write an email to the customer, asking them to send you a promise to pay in writing. Documents like acknowledgement of receipt can be included in your correspondence to strengthen your collections. In case the dispute is resolved after the invoice's original due date, late payment charges will not apply.
For the most part, resolving disputes might seem like a distraction from collections. But you need to remember that one step you progress with settling the disputes is one step you get closer to collecting the affected accounts receivable.