Why Do Business Disputes Happen?

Business disputes are never a pleasant thing to go through. They can be extremely long, overly involved and incredibly messy, but sometimes they are essential to keeping a business running or simply moving past an issue with a client and resolving it. When a business dispute gets as far as a lawyer’s office it has often gone past the mitigation stage, and sitting both parties down might not accomplish much. So ideally you want to catch them before this point, and work with a debt collection agency to resolve them if necessary. This month, we wanted to explore some of the main reasons behind business disputes, and what you can do about them.

Non–Payment

This is the number 1 reason for all business disputes. When one party refuses to pay another, it usually falls to a third party to make the decision about who should be paid what. It could be that the party due to pay doesn’t believe their order was fulfilled, or they are unhappy with the work or service. It could also be because they decided not to pay due to cashflow issues, and instead of attempting to work out a credit plan with the supplier, they have instead ducked payment. There could be hundreds of reasons for an invoice not being paid, and you need to sort fact from fiction and identify who is responsible for which elements of the contract between the parties. In many cases this will require a third party to step in and help mediate the situation.

Differences of Opinion

Sometimes a dispute can happen when each party has a very clear view of what happened, and they both match up – but the conclusions each have come to are different. Differences of opinion can be incredibly difficult to resolve because each party believes they are resolutely in the right. But if your customer believes you haven’t delivered everything they expected, or that the standard isn’t high enough, but you believe you have, the way forward can be a bit muddy. And if the client thinks you still owe them a service, they may withhold payment until they feel they have received what they are paying for. In these cases, it can take a lot of work to resolve things, and more often than not an unhappy compromise is made, and the relationship takes a long time to repair, if it can be at all.

Conflict

Sometimes those differences of opinion aren’t business related – they can be personal too. Some people just don’t get on, and if you have a disagreement with a client, it can make your business relationship very strained. Depending on the nature of the relationship and the conflict, it can cause bigger issues, including withholding of payment out of spite, or even harassment. It really isn’t something many people like to think about, but it does happen between business owners more often than you’d think, and it’s something we end up mediating between when payment issues arise.

Disputes Within The Business

In some cases, the root cause of a dispute between your business and your client isn’t anything to do with you at all – it’s because of disputes happening within the client’s business itself. There are all sorts of issues that can go on within the arena of office politics that can bleed over into supplier relationships, including:

• Ineffective of undertrained management
• Unfair treatment within teams
• Unclear job roles
• Poor communication
• Bullying or harassment
• Increased workload
• Unresolved problems

Any one of those can cause issues within the client’s workforce, and it’s easy to see how misunderstandings or disagreements can cause a client to feel that the project isn’t going well, and there is a chance they would blame it on you rather than address the issues.

At Debtcol we believe in resolving disputes as quickly and amicably as possible, which means staying out of the court system whenever possible. If you have a commercial dispute that is stopping you from being paid and would like our help, please just get in touch to arrange your free consultation.