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How to Resolve Invoice Payment Disputes

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As a business owner, managing your debtors and improving your cash flow are crucial to the success of your business.

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Therefore, you must take proactive steps to avoid customer payment disputes and prevent cash-flow issues. This article explains how to avoid or resolve invoice payment disputes.

 

Draft Effective Business Terms and Conditions

A customer enters a binding contract each time they buy from you. A written contract setting out the terms of that transaction provides clarity and can reduce the risk of invoice payment disputes arising. Here are four top tips for writing your business terms and conditions:

Tip Explanation
Be clear about what products or services you sell The more detail you provide about your goods or services, the more customers know what they are getting. This may help if a dispute arises and they try to avoid payment. 
Dictate how your client or customer can accept your business terms and conditions Once they accept, your customer will be bound by your terms and conditions. Standard acceptance methods include signing, ticking an acceptance box online, confirming in writing or paying a deposit. Choose the method that best suits your business and your customers.
Set out your payment terms and acceptable methods of payment Payment terms should indicate the timeframe in which you require the customer to make payment. You should also set out the consequences if the customer fails to pay on time, such as being charged interest on overdue amounts.
Include a dispute resolution clause In the unfortunate event that a dispute does arise, a dispute resolution clause can assist you in resolving the dispute faster and more cost-effectively. Dispute resolution clauses usually require an attempt at Alternative Dispute Resolution before escalating the matter further.

Your business terms and conditions are essential in managing your debtors. Therefore, you (or your lawyer) should draft these terms specifically for your business. They will form the foundation for any future debt recovery proceedings. It is far easier to point to terms and conditions in an agreement than to rely on a verbal agreement or informal email chain.

Avoid Delays and Always Follow Up

Issue invoices promptly while the transaction remains fresh in your customer’s mind. The invoice should contain sufficient detail about the goods or services you have provided to avoid confusion.

Once an invoice becomes due, be sure to follow up. You may only need to give customers a friendly reminder by email or phone.

Additionally, diarising when accounts become due or implementing an automatic notification system into your accounting software are great ways to keep on top of debtors.

Keep Communicating

Keeping the lines of communication open with a customer who owes you money is essential. If those lines of communication close, it is unlikely that you will receive payment without escalating the matter further. Some tips for keeping communication open:

  • resend a copy of your outstanding invoice;
  • remain calm as disputes tend to escalate quickly (sometimes unnecessarily) when emotions are left unchecked;
  • speak with the person responsible for paying your invoice;
  • confirm in writing the amount outstanding and when payment was due;
  • ask questions and listen. There may be a reason your invoice has not been paid; and
  • keep a paper trail. If you start debt recovery proceedings later, you can use this trail as evidence.

However, even after doing everything in your power to coerce payment, escalating your debt recovery to a lawyer may be your best option. In this case, issuing a letter of demand is the next step.

Key Takeaways

Resolving invoice payment disputes quickly can improve your business’s cash flow by ensuring you receive money owed in time to pay your debts. You can increase the odds of customers paying on time by having well-drafted terms and conditions, following up promptly and keeping communication open.

 

 

Meryem Aydogan
Law Graduate
legalvision.com.au

 

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Tax and BAS returns

Taxation

The implementation of effective tax strategies is an integral part of the financial planning process. Structuring the way in which you receive your salary, superannuation contributions, investments, risk and debt management can significantly minimise your tax implications and are an essential component of your wealth creation and retirement strategy.
At Clear Picture, we want you to accomplish your financial objectives in the most tax-efficient manner as other aspects of your financial plan become easier to implement when your tax liability is minimised.
Our strategies are tested, proven and successful. We offer a broad range of taxation advisory services including:
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BAS

Lodging your BAS correctly and on time can be a difficult and confusing process. You can avoid risk and stress simply by being confident that your ATO tax liabilities and obligations are sorted and your BAS lodgement is correct every time.
It’s not surprising that peace of mind for many business owners comes with appointing an experienced agent to look after their BAS services for them.
Our friendly, service orientated team offer a range of BAS services and lodgement options to suit all small business owners so you have more time to do what you do best – running your business and earning money.
Services include:
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  • Preparation of Instalment Activity Statements and Employee Payment Summaries
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  • Handle payroll and superannuation obligations including Reportable Employer Super Contributions
Contact Us

Accounting

Straight forward and stress-free accounting services are what businesses of all sizes need form their accountants and we believe we provide exactly that. By providing cutting edge accounting and taxation services, and using the right products for your record keeping, our team at XX will work closely with you to ensur we understand your needs. Only in this way can we help you achieve your goals, help you manage your cash flow and help you meet your tax obligations.
While fiscal compliance is of the upmost importance, we also believe in offering professional management advice and support at all times. We are committed to offering the highest level of friendly and professional service and welcome the opportunity to work with you.
The areas we specialise in are as follows:
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  • Personal & Business Tax Returns
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  • Business ‘start up’ advice
  • Prepare Business plans and financial budgets and review these regularly
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  • Trust & company structures
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  • Taxation – GST & PAYE advice, BAS preparation
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Bookkeeping and Payroll


Bookkeeping

Clear Picture can take over all, or some of your bookkeeping activities allowing you to concentrate on growing your business.
We can:
  • Design, establish and review accounting systems and software
  • Perform checks, reconciliations and end of financial year reports
  • Manage your accounts receivable and accounts payable
  • Ensure your business is up to speed with legislative requirements and management reports
  • Undertake payroll duties and compliance
  • Prepare and lodge BAS statements
  • GST & PAYE advice
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Payroll

We can assist you with all facets of payroll and reportable contractor payments. Our professional team are fully versed in all legislative requirements and the processes required in managing this crucial part of your business.
The primary objective of payroll processing is to ensure that employees receive all the financial entitlements they are owed in a timely manner.
Poor payroll processing can be very detrimental to a business as it can significantly impact net income and lead to disgruntled staff. With an abundance of legislation, payment methods and withholdings, payroll management can be a difficult and time-consuming process.
Payroll processing services include:
  • General Payroll – ensure your staff are paid the correct rates and paid according to the correct hours worked.
  • Payslips – Our team can prepare your staffs payslips on your behalf and email them directly to you or your staff along with
  • PAYG Withholdings – Any business that has employees or pays employees of another business must withhold an amount from payments made to them. Any payments made to a business that doesn’t quote an ABN on an invoice or other documentation must also have an amount withheld from payments.
  • Taxable payments reporting – Businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. These payments need to be reported to the Australian Taxation Office (ATO) on the Taxable Payments Annual Report, or electronically.
  • Entitlements – calculation of leave including holiday, personal, long service and rostered days off.
  • Payroll Tax, Workers Compensation Insurance, Employment Forms – some or all of these may be needed for your business.
  • Efficient and Electronic systems – these should simplify all processing and provide greater security for you and your staff.
  • Superannuation should be calculated and paid – this is a compulsory whereby employers are required to pay a percentage on top of “ordinary time’s earnings” to a nominated superannuation fund. These contributions need to be made at least once every three months and penalties for late payment are very severe.
  • End of Payroll Year Processing – Reconciling, Generation and Lodgement of employment group certificate’s and payment summaries, taxable payment summaries, reportable fringe benefits and lump sum amounts

Business start ups

There are four main business structures commonly used by businesses in Australia and we can help with them all:
Sole trader: an individual operating as the sole person legally responsible for all aspects of the business.
Partnership: an association of people or entities running a business together, but not as a company. A partnership is relatively inexpensive to set up and operate.
Company: a legal entity that is separate from its shareholders.
Trust: an entity that holds property or income for the benefit of others. Trusts require a formal trust deed that outlines how the trust operates, requires the trustee to undertake formal yearly administrative tasks and if you operate your business as a trust, the trustee is legally responsible for its operations. A trustee of a trust can be a company, providing some asset protection.
It is important to note that you can change your business structure throughout the life of your business.
Before commencing a new business, the following are some of the key items that need to be considered:
  • Decide on the most suitable structure for your business – sole trader, partnership, trust or company
  • Prepare a business plan, cashflow projections, budgets, and trading forecasts
  • Assess your finance requirements, advise on the best sources of finance, and draw up the necessary proposals
  • Establish a good working relationship with your bank
  • Register for a Tax File Number and an Australian Business Number with the ATO
  • Complete registration procedures with Australian Securities and Investments Commission
  • Deal with company secretarial issues
  • Set up a recording system for your internal use and for complying with statutory requirements

Each new business is different and needs to be considered in relation to your individual circumstances and our experience can ensure you are maximising your opportunities.

Consulting

Tax & Accounting Consultancy Services

Management Accounting includes the preparation of management reports and accounts that provide accurate and timely financial and statistical information. Information required by managers to make day-to-day and short-term decisions more efficiently and effectively to achieve desired outcomes such as increasing profit or delivering improved services.
Unlike financial accounting, which produces tax returns and annual reports, management accounting generates monthly or weekly reports for an organization's management and decision makers. These reports typically show items such as available cash, sales revenue, orders in hand, accounts payable and accounts receivable, and outstanding debts. An important aspect of Management accounting is determining what information management needs and communicating this effectively.
Clear Picture can assist with all aspects of management reporting including:
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Tax advice, tax planning and structuring advice

Tax Planning

Tax time is coming up. Are you prepared?
When the time comes to deal with your own taxation and accounts, it can be stressful and hassling. Though through good preparation and planning, you can make tax time work for you and potentially reduce the impact of tax, while keeping up to date.
Clear Picture are specialists at accounting and taxation. Based in XXX, we aim to provide our clients with comprehensive tax planning advice and strategies, all at competitive prices.
We provide assistance for:
  • Individuals
  • Families
  • Artists
  • Trusts
  • Businesses and
  • Organisations (non-profit and commercial)

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Tax Planning

Tax time is coming up. Are you prepared?
When the time comes to deal with your own taxation and accounts, it can be stressful and hassling. Though through good preparation and planning, you can make tax time work for you and potentially reduce the impact of tax, while keeping up to date.
Clear Picture are specialists at accounting and taxation. Based in XXX, we aim to provide our clients with comprehensive tax planning advice and strategies, all at competitive prices.
We provide assistance for:
  • Individuals
  • Families
  • Artists
  • Trusts
  • Businesses and
  • Organisations (non-profit and commercial)

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Structure

A client needs to put in place the right strategies and structures, to create wealth and then review these strategies and structures on a regular basis. That is because your circumstances and goals will change and so will the economy and the legislation relating to how your affairs are structured.
There are many paths that may be more appropriate than others such as:
  • Selecting the best tax structure;
  • Using gearing;
  • Reducing debt;
  • Using Shares, managed funds or other types of assets. Indeed it may be a combination of many to properly meet your needs.

Rental properties

Like any form of business, property ownership can be less than hoped for. However, rental income, gearing, purchase, borrowings, management, appropriate structures, and advice are how XX help clients who rent commercial and residential properties.
Our aim is to ensure such investments generate the appropriate returns.
We assist in a variety of ways:
  • Advice on funding
  • Advice with purchasing
  • Cash flow analysis of property investment
  • Guidance in tax related areas including negative gearing and capital gains tax
  • Advice on ownership structures
  • Preparation of initial land tax returns and land tax variation returns

Trusts

Trust Advice

A trust provides a valuable way of protecting the assets you have accumulated for the benefit of yourself and others. A trust can also be an effective structure for running your business.
We have extensive experience with trusts and are able to offer specialist advice on establishment and compliance, ensuring that all statutory requirements are met.
Clear Picture are also able to organise for the preparation and execution of documentation involved in Trust formation.
Our Trust administration service includes:
  • Minute keeping service
  • Annual accounts
  • Taxation
  • Maintenance of CGT register
  • Income distribution
We know the issues and requirements involved with managing Trusts and can help ensure these tasks are undertaken properly.

NZ Clients and temporary residency

NZ Clients and temporary residency

Clear Picture help New Zealand individuals and businesses — including temporary residents and recent arrivals — manage tax, compliance and financial planning so you can focus on settling in and growing your activities.

Services for NZ clients & temporary residents

  • Tax residency assessment and advice (determine NZ tax residency and obligations)
  • Income tax planning for residents and part-year taxfilers
  • PAYE, GST and IRD registration and compliance
  • Withholding taxes, foreign income disclosure and double tax relief guidance
  • Property tax, rental income and bright-line rule support
  • KiwiSaver advice, provisional tax and payroll setup for employers
  • Cross-border structuring and tax-efficient repatriation of funds
  • End-of-year tax returns, tax credits, and liaison with Inland Revenue

Get in touch for a tailored consultation to clarify your NZ tax position and compliance obligations.

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