Factoring Blog

Minimize Disputes – Using A Product/Service Acceptance Letter

product acceptance sucessCustomer disputes are one of the most common reasons for non payment of invoices. Depending on which factoring company you ask, about 30% of their problem invoices will be related to disputes. Fortunately, there are ways to minimize this problem. Ideally, the best way to handle a dispute is to prevent one in the first place. And the best way to prevent one is to make sure to deliver what your customer is expecting – and – to have your customer agree that their expectations where met. This will certainly go a far way to minimizing your invoice disputes.

To accomplish this, you need two documents – and the help of a attorney.

  • Contract: It is usually a good practice to have a contract outline the details of any sale you make. It should contain information about what is expected, when it’s expected by and how to address any problems. Be sure that all your corporate sales are covered under a contract.  Also, be sure to have an attorney help you write the contract.
  • Acceptance letter: Although less common, having an acceptance verification letter can save you a lot of trouble. This document is signed by your customer right after you deliver your service/product to them. In it, they acknowledge their satisfaction with the service/product.

Having an acceptance verification letter can be crucial because it brings up the issue of customer satisfaction to the forefront – right after the work is completed. If the customer is not satisfied, they will bring up any issues at this point, allowing them to resolve them quickly. If the customer is satisfied, they will sign and you will have written proof that they were satisfied, lowering the chances of a future dispute.

These types of letter vary by industry, so your attorney will need to help you craft one. In general, they cover:

  1. Scope of service
  2. Delivery time table
  3. Criteria for acceptance (quantity, quality, etc.)
  4. Acknowledgement of satisfaction

As we have mentioned in a different post – disputes when factoring is involved are tricky. Using a solid contract and a well crafted acceptance letter will help you minimize the chances of non payment due to dispute. If you are using invoice factoring, having a letter as part of your billing process may help you get better terms because it lowers the risk of non payment.

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