What to do when a customer disputes an invoice after delivery
Updated 2026-10-24
When a customer disputes an invoice after delivery, ask for the dispute in writing with specifics, then compare it against the order, delivery records and your terms. Fix real errors quickly with a credit memo, collect the undisputed portion now, and negotiate the rest. For goods, the UCC generally requires buyers to reject or give notice of problems within a reasonable time, so a late, vague dispute is weaker. Be careful cashing checks marked paid in full.
Get the dispute in writing, with specifics
A phone call that says 'we have a problem with that invoice' is not a dispute you can resolve. Ask the customer to identify, in writing, the invoice number, the line items, what is wrong and what they want: a credit, a replacement, a return or a price adjustment. Ask for photos, inspection reports or receiving records if the issue is quality or quantity.
This request alone separates many real disputes from stalling. A customer with a genuine issue usually explains it. A customer looking for time often goes quiet or keeps the complaint vague.
Check the facts against your records
- Purchase order, quote or contract: what exactly was ordered and at what price
- Signed proof of delivery and any exceptions noted at receipt
- Shipping records, packing lists and serial numbers
- Change orders or emails approving changes in scope or price
- Your terms of sale or credit application, including any deadline for reporting problems
- Prior payments, credits and any earlier complaints about the same order
What the UCC says about goods
For sales of goods, most states follow Article 2 of the Uniform Commercial Code. In general, a buyer that receives goods must reject them within a reasonable time after delivery and notify the seller, or it is treated as having accepted them. A buyer that accepts goods must notify the seller of a breach within a reasonable time after it discovers or should have discovered the problem, or it may be barred from any remedy. Accepted goods can sometimes be rejected later through revocation of acceptance, but only in limited circumstances, such as a defect that substantially impairs their value and was hard to discover.
What counts as a reasonable time depends on the goods and the circumstances, and your terms of sale may set a specific inspection period. A buyer that used the goods for months and raised a complaint only when pressed for payment is in a weaker position than one that called the day of delivery. Services contracts are governed by general contract law instead, where the contract's acceptance and warranty terms carry more weight.
Collect the undisputed amount now
Most disputes involve part of an invoice or part of an order. Ask the customer to pay everything not in dispute while you work out the rest. If one line item out of twenty is contested, there is rarely a good reason to hold the other nineteen. Put that request in writing so there is a record if they refuse.
Where a customer withholds a whole invoice over a small issue, that is useful information about how serious the dispute really is.
Keep the conversation moving with dates. After each exchange, send a short written summary of what was agreed, what is still open and when each side will respond. Disputes that drift without deadlines tend to turn into accounts that are six months old, and by then both the evidence and the customer's ability to pay may have faded.
Resolve real problems quickly
If the customer is right, fix it fast: issue a credit memo, ship the replacement or adjust the price, and send a corrected statement showing the new balance. Quick resolution protects the relationship and removes the customer's reason not to pay the rest. If the customer is partly right, propose a specific adjustment in writing and a payment date for the balance.
Be careful with one specific trap. If a customer sends a check marked 'paid in full' for less than the balance on a disputed account, cashing it can, under UCC 3-311 and similar state rules, settle the whole debt as an accord and satisfaction if the requirements are met. Talk to counsel before depositing a full-payment check for less than you are owed.
When a dispute looks like a stall
- The dispute first appeared after the account was past due or after a final notice
- The customer accepted, used or resold the goods without complaint
- The complaint is vague and changes each time you ask
- No documents or photos support it
- The customer keeps ordering from you while disputing earlier invoices
Next steps if it will not resolve
If you have answered the dispute with documents and the customer still will not pay or make a reasonable counter-proposal, the account is ready for escalation. A commercial collection agency can review the dispute, present your documentation to the debtor and negotiate. We do this on contingency; when a disputed claim needs a court to decide it, we can refer it to a local attorney, with your approval. Because we are not a law firm, legal questions about the dispute belong with that attorney.
Frequently asked questions
Can a customer refuse to pay an entire invoice over one problem?
They may try, but a dispute over part of an order usually does not justify withholding payment for goods or work that are not in dispute. Request payment of the undisputed amount in writing.
How long does a business customer have to dispute an invoice?
It depends on your contract terms and, for goods, the UCC's reasonable-time rules. Credit applications often set a specific window, such as a number of days after receipt.
Should I cash a check marked paid in full?
Be cautious. On a genuinely disputed amount, cashing it may settle the entire debt under accord and satisfaction rules. Get legal advice first if the amount is significant.
Can I send a disputed invoice to collections?
Yes. A collector can work a disputed account, but you should first respond to the dispute and provide documentation so the collector can present your position clearly.