Regardless of context, discussions surrounding money can be tense. This is especially true when it comes to the exchange of cash for services and — what every business dreads most — invoice disputes.

Yet, while we struggle to address these issues head-on with our clients, failure to pay invoices on time is a widespread phenomenon.

According to a global report from UK-based MarketInvoice, 60 percent of invoices are paid late. When we narrow that scope to include only the United States, that number drops to 45.7 percent.

According to these stats, almost half of all invoices in the nation are running past due. Still, we know that clients have numerous reasons for delayed payment, ranging from forgetfulness to lack of funds.

But what happens when the delay is actually the result of an invoice dispute? And how do you ensure a happy client while still bringing home a fair income?

Top Reasons for Invoice Disputes

Basically, an invoice dispute occurs when a client decides they shouldn’t be liable to pay an invoice for one reason or another.

In some cases, this decision comes from a place of deceit on the client’s part. But in most, it’s an honest case of confusion or dissatisfaction.

As for who deals with invoice disputes: If you deliver invoices to customers or clients of any kind, you’ll eventually encounter a dispute.

Now, how about the different kinds of invoice disputes you could potentially encounter?

Accounting errors

One of the most common types of invoice dispute stems from honest accounting errors. Luckily, it’s also the simplest to resolve.

Human error seeps into all corners of life, especially when it comes to running a small business. No matter how diligent you are, there’s a good chance you’ll make a typo or calculating error on an invoice eventually.

If you don’t catch this mistake before sending off the invoice in question for payment, though, you’ll probably have an invoice dispute on your hands.

Pricing disagreements

In some cases, clients will see rates charged on an invoice and decide they’re not what was agreed upon.

Perhaps the client misremembers the agreed price. Or maybe they feel like the final product isn’t worth what they agreed to pay.

Either way, this is why drafting a thorough contract — rate and project scope information included — is so important.

Quality issues

On a similar note, there may be times when a client receives the final deliverable and decides it doesn’t meet their expectations.

Ideally, a patient and understanding client would address these concerns with you before jumping straight to an invoice dispute. Often, though, that’s not how things play out.

Again, a well-written contract can be a lifesaver in these situations. However, careful deliberation might still be needed to reach an agreement.

Scamming attempts

We all want to assume the best of others, especially our valued clients.

Sadly, there’s always a bad one in the bunch.

Hopefully, you won’t need to deal with a client trying to pull a fast one over a delivered invoice. But if you do, it’s much better to be prepared than not.

So, how do you tackle an invoice dispute when one does occur?

1. Don’t Panic

When you first realize a client doesn’t intend to pay their invoice, a range of emotions will set in.

Although it’s certainly not easy, it’s extremely important to remain cool, calm, and collected. Trying to resolve the invoice dispute when you’re feeling angry, hurt, or anxious will do you no good.

While taking swift action is important, make sure you choose your words and contact method carefully.

2. Get in Touch

When emotions are running high and your personal income is on the line, you may feel tempted to get a legal authority or collections agency involved instantly.

However, that’s generally not the best course of action — at least at this point.

There’s a good chance your client has already reached out to refuse the invoice (though some will just let the deadline pass without notice). If this is the case, you already have a head start when it comes to knowing why the invoice was disputed in the first place.

If your client hasn’t shared a reason for the dispute, it’s time to practice your communication skills and work with them as openly as possible.

Yes, you’re likely angry. At the very least, you’re definitely frustrated. But, either way, you can’t move forward with a resolution until everyone’s on the same page.

Keep it in writing

When dealing with invoice disputes, there’s at least a decent chance things could turn into a legal case. If that were to occur, having records of all communication with the non-paying client could benefit your case tremendously.

Because of this, email is one of the better options when reaching out to a client about a disputed invoice.

Request a second set of eyes

As freelancers and entrepreneurs, many of us work alone. However, consulting with a second pair of eyes might be for the best when handling invoice disputes.

If you don’t have a colleague who can help you navigate the situation calmly and professionally, consider reaching out to your lawyer or another semi-neutral party.

Basically, we don’t tend to put our best foot forward when angry or confused. By filtering everything through a third party, you can help protect yourself from further conflict and maybe even repair your relationship with the client in question.

3. Offer a Solution

Has your client brought forth an invoice dispute because you made a mistake? If so, the responsibility of fixing the situation is entirely in your hands.

This fix could be as simple as editing a miscalculated invoice. Or, it could be as complex as addressing an issue with your deliverables themselves.


If your client has complaints about the project or services completed, your contract should trump all. If, by referencing your contract, you can prove everything was delivered as agreed upon, then your client likely has no leg to stand on.

But if your contract is weakly worded, incomplete, or inaccurate, then your client may have the right to pursue legal action if your deny their invoice dispute.

4. Escalate the Case

If you’re unable to reach an agreement with the client, then further action may be necessary.

Generally, your main option will be to take the client to a small claims court. Depending on the invoice amount, however, this option often costs more than you would gain from winning the case.

There are some collection agencies that work exclusively with freelancers and small businesses to ensure payment.

Keep in mind, though, that these companies charge a fee on collected payments, and not all will handle invoice disputes.

5. Prevention is the Best Policy

Like most things in business, preventing invoice disputes is much more effective than solving them. If you can keep your clients from ever raising an issue with your invoicing, then you’ll never need to worry about potentially going to court or hiring a collection agency.

Provide clear invoices

If your invoices are poorly formatted, unclear, or even just printed rather than digital, all kinds of problems can arise.

Not only will clients be more likely to misplace or forget a paper invoice, but if your invoices are poorly drafted, they may not even understand what payment is due and when.

By switching to simple electronic invoicing, you can make sure everyone’s on the same page when it comes time to pay.

Plus, you’ll have better records of everything if an invoice dispute does come up.

Encourage upfront payments

What’s the easiest way to avoid invoice disputes? Request payment before services are completed.

Depending on your specific situation, you might even consider offering discounts for upfront payments.

Of course, this payment structure doesn’t work for all freelancers or their clients. Still, it’s worth trying if you work in a high-risk industry or are taking on particularly large projects.

Draft a usage clause

Before taking on a job, it’s a good idea to add a usage clause to your client contract.

In short, this clause can prevent clients from deciding not to use (or pay for) the agreed-upon deliverables.

As with any part of your contract, though, this clause must be well-written if it’s going to protect you out in the real world.

Protect Yourself and Your Money

Unfortunately, invoice disputes are something almost all freelancers and business owners will encounter at some point. With the right preparation, though, these conflicts can remain just a small blip on your radar.

But if you’re struggling to manage your invoices, even if you’ve yet to experience an actual dispute, then you’re likely on the road to disaster.

Instead of relying on paper invoicing or D.I.Y. formatting, invoicely can help you create, send, and manage digital invoicing for all of your clients.

Learn more about using invoicely to make invoice management easier on you, your clients, and your wallet.