- The bad quality of production and / or performing service.
- The lack in commercial contractualisation.
- Administrative reasons.
- Invoicing errors.
Disputes are mainly sources of delay in payments as invoices affected by a dispute are not paid by dissatisfied customers. As a reminder, to be recoverable a invoice must be:
- Valuable (to be assessed in cash).
- Due (due date is passed).
- Certain (cannot be contested by the buyer).
In addition, dispute adversely affect customer satisfaction, especially if they are not resolved quickly.
Disputes management in My DSO Manager
My DSO Manager includes an effective process for identifying and handling disputes. Invoices disputed are qualified with a dispute status (eg Price dispute, quality dispute...) and a comment detailing the problem.
This information is sent to a resolver (sales manager ...) who has to fix the dispute.
The disputed debts are then driven through the disputes report that allows to monitor all open disputes and to chase up internal actors responsible for the resolution. See more with online demo.
Disputes and Credit ManagementThe identification and treatment of disputes are closely related to management of customer receivables and cash collection. The problem they generate must be integrated into the collection process, whose objective is to obtain payment of bills on their due date.
Thus, the first collection action is done before the due date of the invoice in order to ensure that there is no dispute preventing the payment of the invoice.
If there is dispute, this preventive recovery action allows to detect it as soon as possible and to resolve it as quickly as possible in order to get paid the bill. This helps to speed up the collection process and the payment may be done on the due date despite the dispute, which has been resolved in the meantime.
Dispute management processA process of disputes management must be established in the company to determine the roles and responsibilities of each department involved and ensure proper consideration of the disputes by the organization.
Nothing is worse than leaving aside disputes or treat them "when we have time." Studies have shown the impact of litigation on customer satisfaction:
- If untreated or poorly treated, the effect is very negative.
- If rapid and effective resolution, customer satisfaction is ultimately greater than it would have been if there had been no dispute!
Key factors of success are:
- Transversality: sharing and understanding of the process by the various departments involved.
- Determination of service that is accountable to management on the volume and length of litigation. It is this service which will boost stakeholders to accelerate the resolution of disputes. In large companies, it is relevant that this mission belongs to Credit Management / Collection department.
- Fluidity of exchanges and actions between those responsible for the collection, administration, sales and trade.
Dispute typesThere are different types of disputes for which treatment may be different because of their nature.
For example, a dispute related to a billing error (bad wording, error on the price ... etc..) can be solved by the sales administration when a technical dispute will be considered by the sales manager or the technician.
It is therefore necessary to categorize disputes to improve their treatment. For example:
- Quality dispute: includes disputes concerning the quality of products and / or services performed.
- Price dispute: price differential between the charged and the one negotiated by the client.
- Administrative dispute: problems of missing or poorly written documents (invoices, purchase orders, packing list ... etc..).
- Event date dispute: for example an invoice issued so that the material was not sent to the client.
- Missing goods dispute: differences between what was billed and actually delivered.
- Double billing dispute: a delivery is billed twice by mistake.
Collect disputed invoicesThe process of debt collection is stopped during the treatment period of the dispute. It will resume when the dispute is resolved with a new due date equal to the date of resolution of the dispute.
The first action is a collection action level 1 with the aim of obtaining a promise to pay immediately.