Credit Management
Dispute Resolution Processes For Debt Collection
By Wasilwa Miriongi
When it comes to disputes the most common question is , what happens if a customer that you speak to does not agree that they owe an invoice or debt to your company ? This is the paradox most debt collectors have to endure in their line of duty .
In modern computerized organization the systems will allow disputed items to be flagged . If necessary , these can be excluded from due or past due totals , but they certainly should not be excluded from the customer statement or its total balance .
It is not uncommon for debts to be disputed , but they remain unpaid , requiring resolution by credit note or by payment . If the nature of the company ’ s computer system allows disputed items to be flagged , the statement should carry a message to show the total amount in query .
The customer can see at a cursory look that the queried items have been noted , and the collector can see that such invoices still require attention . When applied to an on-line system , the screen display should be similar to the last statement sent to the customer with subsequent items being added daily .
In this digital era unresolved disputes may compel some consumers to leave your company a bad review on the internet , it is a known fact that negative online reviews can inspire many reactions from those who read them especially the company ’ s main stake holders .
Consequences of uncoordinated disputed resolution process are many including : higher delinquency , requirement for excessive and unnecessary credits , allowances , and concessions that decrease revenue and profitability . The longer the time it takes , the greater the probability that a credit will be granted , even if the customer is wrong . This stems from the fact that factors like deterioration of people ’ s memories , the degradation of documentation , and the turnover of staff on both sides will generally increase the tendency to concede .
On the other hand , unhappy customers may like your product or service , but may find conducting business with your firm very difficult . Waiting long periods of time for a simple credit note is particularly annoying for customers . Inaccurate billing and poor administration of a customer ’ s account may affect your supplier quality rating with your customers , which can ultimately lead to lower sales volume , lower productivity from handling , reconstruction , and re-handling disputes over an elongated time frame .
There is no gainsaying in the fact that customer dissatisfaction , shown in disputing invoices and raising queries , is expensive for any seller , in terms of both unpaid amounts and reduced sales .
Agree there is need to establish and tag the real issue that needs to be resolved and get the other party ’ s acknowledgement on it . Ask the other party as to what their expectations are in resolving the dispute . State your concerns if any . Review alternatives . Build the consensus around the solution , with or without concessions seek common grounds again with or without trade-offs .
Every successful seller knows that it is important to deliver the right goods , at the right price , to the right place , in the right quantity , at the right time , and with the right documentation . It is then so much easier to demand payment . It is wrong to assume that every customer query is merely a delaying tactic . Some are , but all queries must be taken seriously until proved wrong .
If the customer is right in a disputed debt , the sooner the credit is issued , the sooner the rest of the account can be collected , and the sooner a potentially dissatisfied customer is pacified to smooth the way for further business . Queries are usually first
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