Dispute an invoice? Think twice.
How quickly do you take the step of disputing an invoice with which you do not agree? As an entrepreneur certainly you should not let people walk all over you. But it is better not to dispute an invoice without thinking carefully, because such an action could cost you a lot of money. In this article, we explain how it works.
Only dispute with a valid reason
Suppose your supplier made a mistake when calculating the invoice amount, the services provided were incomplete, or the supplier did not keep all their promises. In these cases, you have a few options.
The first is to talk to your supplier. Trying to reach an amicable agreement most often leads to a win-win situation.
If this does not work, you can dispute the invoice. But, beware—your dispute had better have a legal basis. Disputing without a valid reason can have serious legal and financial consequences. The other party may well assume you are disputing the invoice to postpone payment.
Contesting an invoice using the Unpaid procedure
Have you not paid an invoice simply because you do not agree with it? Have you ignored the reminders? If so, your supplier can initiate IOS or Unpaid proceedings against you. Even when this is in progress, you can still dispute the invoice. After the bailiff has served you with a payment demand, you have 38 days to do so.
Remember: it is better to have a solid file if you want to dispute the debt at this stage. The financial consequences can be severe if your dispute is unfounded. That is why late disputes are rare. Recent research, published in the Journal of Insolvency and Bankruptcy Law (Tijdschrift voor Insolventie- en Beslagrecht (TIBR)), shows that of the first 100,000 IOS files, only 1.28% were contested.
Arguing wrongly could cost you a fortune
Although it is relatively easy to dispute an unpaid invoice within the IOS procedure, you should think twice before doing so. It means the case goes to court and can have far-reaching consequences.
If you win, you will have to pay a whole series of costs on top of the principal amount of the invoice, including:
- A 10% damage clause.
- The current interest on the existing invoices, of at least 8% per year.
- The bailiff costs incurred for the IOS procedure (Unpaid procedure).
- The additional writ costs (approximately €300).
- A court fee to the other party's lawyer; this can amount to up to €18,000.
- Your own lawyer's fees.
If the judge rules that you are contesting without good reason or with a fallacy, you also risk a fine. For example, the Corporate Court of Ghent recently sentenced a company to an additional fine of €250. Based on this article of the law, 'The party who uses the legal process for evidently delaying or unlawful purposes can be sentenced to a fine of €15 to €2,500, without prejudice to the damages that could be claimed.'
In short, only dispute an invoice when you are certain that you are right. Do you know that you are in the wrong? Then you can save yourself time, trouble, and money in the IOS procedure by paying the outstanding balance to the bailiff as quickly as possible.
In any case, it is to your advantage to react quickly when you disagree with an invoice, and to pay them promptly when you do, because there are also costs associated with late payment.