The short version
Ask what is wrong, in writing, before you do anything else. If the invoice is wrong, credit it and reissue. If part of it is wrong, split it so the agreed part can be paid now. If nothing is wrong, it is not a dispute and the answer is the overdue sequence.
The first move, every time
A dispute arrives as a phone call or a one-line email: this is not what we agreed. Resist answering it in the same medium. Ask, politely and in writing, which part is wrong and what they expected instead.
Two reasons. The first is practical: almost every dispute turns out to be one line, one quantity or one thing that was never written down, and you cannot fix a thing you have not identified. The second is that the written answer is the record. If this ends up anywhere formal, the difference between a documented disagreement and a remembered one is the whole case.
A wording that works. "Happy to look into this. So I am fixing the right thing, could you tell me which line or lines you are querying and what you were expecting? I will come back to you the same day." It is not defensive, it asks one question, and it commits you to a timescale.
If the invoice is wrong
It happens. The rate was the old one, the quantity was miscounted, the job was smaller than the estimate. Fix it properly, which means a credit note rather than a quiet edit.
- Raise a credit note against the original, referencing its number, for the amount being credited.
- Issue a corrected invoice with a new number in your normal sequence, and reference the credit note on it.
- Send both together with one sentence saying what happened. Nobody minds a correction; people mind a mystery.
- Do not delete the original, and do not reuse its number.
Why the fuss? Because the invoice you sent is already in somebody else's records. Deleting your copy does not delete theirs, and two documents with the same number saying different things is a problem that surfaces at audit rather than today.
If part of it is wrong
The most common case, and the one where the money moves fastest if you handle it well. Something is genuinely queried and the rest is not in doubt. Do not let the queried part hold the whole invoice.
- Ask them to pay the agreed part now. Most clients will, and it immediately reduces what is at stake.
- Record the part payment on the invoice, so the balance outstanding is the disputed amount and nothing else.
- Settle the rest on its own. Credit it, or hold it, or agree a figure, but do it as a separate conversation about a smaller number.
- Do not reissue the whole invoice at a lower figure just to make it go away. You have then agreed the client was right about everything.
If nothing is wrong
Sometimes the query is a way of not paying. The tell is that the reason moves: it was the price, then the timing, then something nobody mentioned before. At that point it is not a dispute and treating it as one wastes weeks.
Answer the stated reason once, in writing, with the evidence: the accepted quote, the signed work order, the change order. Then move to the overdue sequence in the chasing guide: the overdue notice, the late fee where you are entitled to one, and the formal demand.
Making disputes rarer
Almost every dispute traces back to something that was not written down at the time. The four habits that remove most of them:
- Quote, do not estimate, when the price is meant to be fixed. The word at the top of the document is the whole difference. See which document to send.
- Write down what is not included. An exclusions line prevents more arguments than an inclusions list.
- Raise a change order the day the scope moves, not at the end. The change order guide has the form.
- Itemize the invoice. A single total invites an argument about the whole figure; itemized lines localise it to one of them.
Doing it here
A credit note is an ordinary invoice with the title changed and the amounts entered as the credit. Every design in the templates has an editable title, so setting it to Credit Note and referencing the original in the notes is the whole job. Record part payments in the amount paid field and the balance due follows on its own.
The reply that ends most disputes
A queried invoice is usually a question wearing a complaint. The reply that resolves it does four things in order and skips the defense.
- Acknowledge it the same day. One line saying you have it and you are looking. Silence turns a question into a position.
- Repeat the query back in your own words. Half of all disputes end here, because the thing they are disputing is not the thing you thought.
- Show the paperwork, not the argument. The quote, the change order, the signed work order, the dated email approving the extra. Attach it rather than describe it.
- Offer the next step with a date on it. A credit note for the line in question, a call tomorrow, or payment of the undisputed part now and the rest when it is settled.
Take the undisputed part. If a client queries one line on a five line invoice, ask them to pay the four they agree with while the fifth is resolved. It is normal practice, it protects your cash, and it narrows the argument to the only line that is actually in question.
Preventing the next one
Disputes cluster around the same few gaps, and each one is closed by a document rather than by a conversation.
- Extra work with no paper. Anything agreed on site goes in writing before it is done, even as a one line message.
- Descriptions only you understand. A line reading site works, 3,400 invites a query. Itemize what was done.
- A quote and an invoice that do not match. Convert the quote into the invoice rather than retyping it, so the client can see nothing moved.
- An invoice that arrives long after the job. Memory fades and the person who approved it may have moved on. Invoice while the work is still recent.
The tools for this
Common questions
What should I do first when a client disputes an invoice?
Ask what specifically is wrong, and ask in writing. Almost every dispute is one line, one quantity or one thing that was never agreed, and you cannot answer it until you know which.
Should I delete an invoice that turns out to be wrong?
No. Raise a credit note against it and issue a corrected invoice with a new number. Deleting an invoice leaves a hole in the sequence, and reusing its number leaves two different documents with the same reference.
What is a credit note?
An invoice in reverse. It references the invoice it corrects and credits some or all of it, which is how the correction shows up in both sets of books instead of vanishing.
Can a client pay part of an invoice?
Yes, and on a partly disputed invoice it is the sensible outcome: they pay the part that is agreed while the rest is sorted. Record the part payment and the balance still outstanding.
What if the client just refuses to pay and gives no reason?
Then it is not a dispute, it is non-payment, and the answer is the escalation sequence rather than a correction. Overdue notice, late fee, formal demand, and then whichever route your jurisdiction offers.
Can I charge a late fee on a disputed invoice?
On the disputed part, it is usually a bad idea and sometimes not permitted, because the amount is not settled. On the undisputed part that they are simply not paying, the ordinary rules apply. Check the rule where you trade.
Can I charge a late fee on an invoice that is being disputed?
It depends where you trade and on what your terms say, and it is rarely the right move while the query is genuine and being answered. A fee applied mid-dispute turns a solvable question into a second argument. Resolve the line, then apply your terms to what remains unpaid.
Should I issue a credit note or a corrected invoice?
A credit note, in almost every case. It cancels the amount and leaves both documents in the record, which is what an accounts system and an auditor expect. Replacing an invoice that has already been entered on the client's side creates two versions of one job.