Overview

Disputed invoices are a headache for many textile companies like yours. They are the main reason that payments are delayed, cash flow is under pressure, and trade relationships deteriorate.

Neglecting disputes is not an option that many companies can afford, as the margins in the textile sector are already slim. As long as the disputes stay unresolved, you cannot perform any effectual collections activities regarding the affected accounts receivable. Next to that, the longer the disputes drag on, the less likely that payment will happen. Those invoices will often end up being written off as bad debts.

Settling disputes is a complicated yet necessary path you need to navigate. It may involve other teams outside of your finance department. Defining a process to manage disputes and act on it will benefit the speed of your dispute handling and the efficiency of your collections.

Below are some key guidelines you can use as a start to develop your organisation's own dispute management process.

One important point to keep in mind: It is about the balance between the time and working capital you can spend and the optimal outcome you would like to achieve.

Continue: 1. Check for disputes before they arise