How to settle an invoice dispute

Don't lose money over conflicts with clients. Patrick Dodd of invoicing app Blinksale explains how to settle things amicably.

If you think invoicing is the worst part of being a freelance designer, you've clearly never been in an invoice dispute.

Don't worry, though, it's coming. It happens to everyone eventually, whether it's because a client doesn't like the work, thinks charges were added but not agreed upon, or just doesn't have the money to pay you right now.

When an invoice dispute happens, don't feel too bad. There are things you can do to keep the relationship with your client healthy and even recover some of the cash you're owed.

A few prevention tips

If you aren't currently in an invoice dispute, make sure you work with your client to get everything in writing before you start doing any work. Detail exactly what will be delivered and when.

At the very least, make sure you communicate all of this information to the client in an email, so a record and time stamp is kept. Then, if there is a dispute, you can both go back and read exactly what was said. (It's funny how quickly people forget.)

Another great prevention tip is to charge a deposit for your work. While this might not prevent disputes, it will prevent a dispute from delaying or negating your pay. Taking a percentage upfront will guarantee you don't end up working for free, and it also works as a great way to 'start the clock'.

If a client wonders why the deliverable is a week behind, you can simply point out that, per your contract, you waited until the deposit was paid to start working. Hard to argue with that.

But you're probably not reading this to get tips on prevention. Most likely, you're already in some sort of dispute and looking for tips on what to do next. Prevention may be useless at this point.

The best trick I've learned

Here's the best trick I've learned for handling invoice disputes. First, you need to realize that most of the time, invoice disputes are about one item on an invoice, not the invoice as a whole.

Maybe the client isn't happy with a deliverable, or they feel something was tacked on without their consent. Usually the problem comes down to about 10 percent of the invoice – which means the invoice is actually 90 percent fine.

Apps like Blinksale can help with invoicing itself - but what if the client won't pay?

So here's the trick: Get your client to agree to that 90 percent. Go line by line, deliverable by deliverable, and find out what they're comfortable paying for.

Let them know that of course you don't expect them to pay for something that's incorrect. Then ask if they're willing to pay for the 90 per cent they are fine with, while you continue to work out what to do about the disputed 10 percent.

Why it works

This is a great strategy for a couple of reasons. First, you'll at least get some of your money, so you won't walk away empty-handed. Second, and maybe most important, you are letting your client know that you're willing to work with them.

You're listening. Your goal is simply to be fair. Meeting in the middle like this has a way of cooling people off, helping you both see things from the other's perspective. Who knows, maybe you really did make a mistake.

Getting paid 90 per cent is better than not being paid at all

So what do you do about that 10 percent? Well, there's no guaranteed answer for that. Those are murky waters, my friend. But keep in mind what getting that 10 percent might actually cost you in terms of time and potentially losing a client.

By getting 90 per cent of the invoice paid, you've already sent a pretty clear message that you will stand up for yourself and you don't work for free.

If getting that last 10 percent is going to cost you a client relationship and hours of negotiating, it might be best to let it go. Earn some points with that client. Get a little more sleep.

What's worse than not being paid

Whether you are preventing future invoicing disputes or currently navigating one, hopefully these tips will save you some stress and help you get what's owed to you.

Just remember how important it is – no matter how frustrated you get – to remain cordial and to communicate clearly and professionally. Your reputation is worth more than your invoice.

Words: Patrick Dodd

Patrick Dodd is the President of Blinksale, an invoicing app designed for the small business & freelancer in mind. He's also an avid music guru, sports fan, and surfer.

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