Don't let disputed invoices damage your cash flow

The Better Payment Practice Group [BPPG] has launched a new credit management letter template on its website, www.payontime.co.uk to help businesses overcome problems with late payment from customers raising queries.

• The free, easily downloadable letter template can be used by businesses to fulfill three key objectives:
• To reassure the customer that their query is being addressed;
• To remind the customer [when appropriate] that the undisputed portion of the account is still outstanding or overdue;
• To put a strategy in place that will ensure future queries are dealt with before the invoice becomes overdue.
  

The BPPG recommends that businesses implement a procedure for dealing with queried invoices as part of their credit management policy. A procedure of this kind involves dealing with queries urgently, issuing a written acknowledgement to the customer and conducting a thorough investigation of the customer’s dispute.

A good queries procedure should also ensure that all conversations or exchanges of correspondence with the debtor are properly recorded for future reference to help identify customers who consistently raise spurious queries. These customers should be contacted by a credit manager prior to the due date of future invoices, to check that they have been received and that there is no dispute which may delay payment.

Clive Lewis of the ICAEW and member of the BPPG commented: “Small businesses in particular need to protect their cash flow by making sure that queries and complaints about invoices are dealt with firmly and positively. Some queries may be genuine, others may simply be an attempt by the customer to gain a little extra time to pay their bills at their suppliers expense! All businesses need a follow-up system for credit sales invoices. Such a system should include a good queries procedure. This will help ensure against payment delays of this kind.”

The new template is the latest addition to a suite of debt collection letters that have been launched recently on the site to provide businesses with advice on how to compose invoices and effective reminder letters. These can be accessed by clicking here

You can keep up to date with the Better Payment Practice Campaign by sending us an email

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