How to write an invoice dispute letter

Why it matters

A clear letter gets a faster fix than a phone call that no one writes down. It also gives you a record if the dispute goes further.

Paying the undisputed part keeps the supplier on side and protects your credit terms.

The steps

1. Put the bill on hold. Stop the bill from going into the next payment run. Tell your team so nobody pays it by mistake.
2. Gather the proof. Collect the purchase order, delivery docket, quote or contract and the supplier's invoice. Mark the lines you dispute.
3. Open with the facts. Give the invoice number, date and amount. Say what is wrong in one sentence.
4. Show the difference. List what you ordered or agreed, what was billed and the difference in dollars including GST.
5. Say what you want. Ask for a credit note or a corrected invoice. Do not ask for a refund if you have not paid.
6. Pay the undisputed part. Say which part you will pay and when. Say you will clear the rest once the supplier sends a credit note or shows the line is right.
7. Set a reply date. Give a date, for example seven days. Name the person who will deal with it.
8. Apply the credit note when it arrives. Apply the credit note to the bill. If the supplier shows the line was right, release the held amount for payment.

Worked example

Example Concrete Pty Ltd ordered 100 bags of cement at A$25.00 each and was billed for 120.

Line	Ordered	Billed	Difference
Quantity	100	120	20
Price ex GST	A$2,500.00	A$3,000.00	A$500.00
GST at 10%	A$250.00	A$300.00	A$50.00
Total	A$2,750.00	A$3,300.00	A$550.00

The letter asks Example Cement Supplier for a credit note of A$550. Example Concrete pays A$2,750 on the due date and holds A$550 until the credit note arrives.

Common mistakes

• Writing an angry letter instead of a factual one.
• Not saying what you want.
• Holding back the whole payment when only part is wrong.
• Not keeping a copy and the reply.

Next step

Use the Invoice dispute letter generator first. Then see how to handle a disputed invoice.