What Contractors and Suppliers Can Do When Their Invoice is Rejected
As a contractor or supplier, you know what it’s like to spend weeks waiting for a payment that never arrives. With payments taking an extremely long time to go through in the construction industry, it is sometimes difficult to know if your payment has just been delayed or if the project owner has simply rejected your invoice.
Thankfully, in most cases, owners are mandated by state law to inform their contractors that they are rejecting their invoices. If they don’t, they will most likely be liable to pay. And even if they do, they still might have to pay, regardless of their rejection. In this post, we will take a look at some of the most common reasons why invoices are rejected and as well what actions you can take to dispute a rejected invoice.
Common Reasons Why Invoices are Rejected
Invoices can be rejected for a variety of reasons in the construction industry. Here are some of
the most common explanations for why your invoice might have been rejected:
- * You sent your invoice after the billing deadline.
- * Your client claims that you sent an invoice that charged for more work than was completed.
- * You didn’t include the required documentation like payroll reports, invoice copies, or signed change orders.
- * You added the costs wrong.
- * You billed for change orders that weren’t approved by the project owner.
- * Your customer claims that you’re not in compliance with expired insurance, or an expired license.
- * Your invoice has the incorrect work order, purchase order, or job information.
- * You formatted your invoice incorrectly.
As trivial as these reasons may seem, it is important to look into any claims made by clients that refuse to pay and determine if their claims are accurate. If their claims are valid, then you should be able to rectify the situation. If not, you may choose to file a mechanics lien to put more pressure on your customer to pay.
What to do After Receiving an Invoice Rejection
All invoice rejections should be taken seriously and should be reviewed to determine if the
customer’s claims are accurate. If they are, then you should fix the mistakes and resubmit the
invoice so that it is accurate and reflects the actual cost of the labor and materials.
In addition, if there were any missing documents in your invoice, you should make sure to provide those as soon as possible so that you can resolve the issue.
If there is a major disagreement and your client thinks that you’ve overcharged them, you should be able to provide them with a breakdown of all the specific costs with documentation that verifies that all the charges were fair and accurate.
In most cases, there will come a time in every contractor’s career where he or she receives an
invoice rejection. While resolving these disputes can often be stressful, any disagreements must
be settled by providing all the necessary documentation to verify the invoice.
Because this can be overwhelming at times, many contractors and construction businesses can benefit from consulting a professional lien and notice service company. Of these companies, Nationwide Notice stands apart from the competition. With years of experience serving general contractors, sub contractors, and suppliers, our team of lien experts can help you and your construction company to secure your lien rights and provide your customer with a lien release once your invoice is paid. Check out our website to learn more about how we can help you take back control of your receivables. You can find our full list of service options here to learn more.